Millen's Blog

For Financial Success

0
Comments

Become an Educated Investor

Invest in areas that you have some level of expertise in or be willing to educate yourself. You can subscribe to investment newsletters, read books on investing or attend investment seminars.

If you choose to delegate growing your wealth to a financial planner or an investment advisor, research their suggestions and their track record before signing up to do business with them. Make sure that advisors are not compensated based on the amount of money you invest with them (not commission-based.)

ALWAYS REMEMBER THIS: Nobody cares about YOUR MONEY more than you do, therefore, exercise extreme caution if you outsource managing your money to others.

Don’t Let a Small Loss Become a Huge One

You must exercise utmost discipline with your investments on the stock market because it is extremely difficult to recover your portfolio from a big loss. Here is a market portfolio loss/recovery forecast:

  • If you lose 10 percent, you need an 11 percent gain to get back to ‘square one’
  • If you lose 50 percent, you need a 100 percent gain just to get you back to where you started

You may think it’s very unlikely to lose so much on the stock market…and I say it is highly probable and, in fact, happens all the time. Unfortunately, inexperienced investors get frozen when they experience high losses of value and do nothing with the hope to at least recover their losses. Most of the time, this waiting strategy leads to an even more desperate situation. You don’t want this to happen to you!

Experienced investors know that both, the buy and sell decisions are equally important. However, most individual investors are consumed only by decisions about what and when to buy and almost never think about when to sell. Lack of an exit strategy leaves a big gap in successful investing and often leads to losing money on even initially good investments.

You can set a mental sell stop for your investment and execute it when your position hits this price or enter it explicitly on your brokerage account as a stop limit or a trailing stop. The latter allows your investment to rise but activates a sell order if the position falls by a pre-set amount or percentage. This discipline is yet another form of risk management.

As John Maynard Keynes famously noted: “The market can stay irrational longer than you can stay solvent.” I suggest that you use limit stops or, better yet, 15 to 25 percent trailing stops on ALL your portfolio positions and apply these stops as soon as you execute your buy order. This will limit your losses and preserve your capital, which is the most important thing in investment.

Cool Attitude Factor

It is quite common for novice investors to get emotionally attached to a particular investment and get completely frozen and desperate when a promising investment starts melting away. That is why a cool attitude factor—your temperament—is so essential for successful investing. A high level of stress associated with investments is a sign of an amateur or a greedy attitude.

A poor investor has a “how much can I make on this and how fast?” attitude. A good investor contemplates what needs to be done to minimize losses to pre-set minimums in case the promise of a particular investment doesn’t actualize/materialize. Having a disciplined and rational approach instead of a greedy and emotional one with all your investments is absolutely essential to achieving success in investing.

Many times it is smarter to do nothing. Often, just a few wise decisions over time add up to great wealth. Of course, you have to know when to act and with how much.

Read more on this subject next week…

To Your Wealth, Health and Happiness,

To learn more about Millen and her mission of Financial Freedom, click here

About Millen Livis

Thank You For Sharing ...

Leave a Reply

Your email address will not be published. Required fields are marked *

  • ::Millen has a way of opening up conversations that not only make you feel safe to talk about money, but her questions have been so profound that they have made immediate shifts in my mindset and my circumstances have changed almost immediately too, including more money showing up, but more importantly, more and more opportunities.  I have found new and inspired direction, and am feeling a lot more peaceful and excited about life in general. Millen offers so much value and a solid advice! She is a big picture thinker and it is infectious! Thank you, Millen, from the bottom of my heart and the top of my soul.

    ~ Renee Commins, Coach, Renee Commins Coaching

  • ::Millen Livis is a gift to humanity. Millen is very generous with her time and energy, sharing her vast life experiences and strengths, empowering me to become a better human being. Millen has impacted my life spiritually, emotionally, physically and financially, by her encouragement and clarity. I have not said, “Thank you!” enough.

    ~ Heidi Stefan, B.A. Detox Support Counselor, Archstone Recovery Center of the Palm Beaches, Inc.

  • ::Millen brings together an interesting mix of feminine wisdom, clear logic, assertiveness and humility in all of her interactions. With her warmth, intelligence, diverse experience and passion for ‘Dare to be the best you could be’ message, she inspires other women to reach for the goals they set for themselves.

    ~ Sharon Keller, Golden Bear Realty, LLC

  • ::Using laser like energy, Millen gives her full attention to your issue and stays with it until a satisfactory resolution or conclusion is reached. Open minded, yet direct and honest, Millen balances objectivity with compassion. It is a joy to work with her!

    ~ Mary L. Holden, Freelance Editor and Writer

Money Breakthrough Strategy Session

newlife

During this consultation ($497 value) you will:

  • Create a sense of clarity about the dream lifestyle you really want to have
  • Discover the essential building blocks for achieving financial freedom in your life
  • Determine the #1 thing stopping you from having the financial success you want
  • Identify the most powerful actions that will move you towards the dream lifestyle and freedom you desire
  • You will complete the consultation with the excitement of knowing EXACTLY what to do next to create the lifestyle and financial success you truly want

I would be honored to help you live your best life.
There’s no obligation. Only opportunity.
BEST THINGS come to those who seize the moment and make it their own!

Top