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The Principles of Disciplined Investing and Risk Management
An investor focuses on long-term value and fundamentals, while a speculator gambles on short-term price movements. The essence of investment management is the management of risks, not the management of returns Returns will follow if risks are managed properly. A sound strategy mitigates losses while ensuring sustainable growth.
The Price you Pay
Trading requires finding an edge and consistently applying it with patience, discipline, and a focus on minimizing losses rather than quick riches, as emphasized by Bernard Baruch’s wisdom that the forex market humbles even the most confident traders.
Assert Yourself: Believe in Your Abilities and Stand Strong
Don’t be afraid to assert yourself, have confidence in your abilities, and don’t let the bastards get you down
Start Doing: Actions Speak Louder Than Words
The way to get started is to quit talking and begin doing.
Don’t focus on making money; focus on protecting what you have
Risk management is paramount. Avoid being reckless with your portfolio. Focus on minimizing losses before chasing profits. Financial markets are ever-changing. Traders and investors must stay informed, adjust strategies, and be flexible to survive and thrive.
Webinar: Financial Management
A Morris A Santiago student , Christian Papworth, ICAEW tutor at Kaplan Financial, gives us an overview of the Financial Management module.
Know what you own, and know why you own it.
Understanding your investments is crucial. Blindly buying a stock without knowing the business or the factors affecting it is risky. Invest in companies you can analyze and feel confident about. The key to making money in stocks is not to get scared out of them. Market volatility is normal. Many investors lose money because they…
The Psychology of Trading and the Importance of Risk Discipline
Subconscious biases and emotional tendencies often drive traders to self-sabotage, leading them to make decisions that align more with their hidden desires than their financial goals. Some traders subconsciously “win” by losing money, reinforcing their own behavioral patterns. Additionally, the balance between boldness and caution is crucial; while high-risk strategies may lead to short-term gains,…
Rule No. 1: Never lose money. Rule No. 2: Never forget Rule No. 1
Losing money means you lose your base for compounding returns, which is essential for long-term wealth growth. Avoid unnecessary risks. The stock market is a device for transferring money from the impatient to the patient. Successful investing often requires patience. Those who chase quick gains or panic-sell during downturns end up losing to disciplined, patient…
