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Position Sizing: How to Limit Risk & Maximize Gains
It’s amazing how some of the basic investment strategies – like position sizing – that underpin our philosophy here at Investment U and The Oxford Club, can overlap into everyday life, so to speak.
One Saturday, years ago, some friends and I went looking for a fun day out and found ourselves at the horse track. Among our group was a track first-timer, hell bent on maximizing his winnings. He laid a big bet on a 20-1 long shot. And when the horse hit the wire dead last, he’d officially been indoctrinated in horse racing and true speculation.
Forget making money, he’d managed only…
29Jul2009 | Investment U | 1 comment | ContinuedPosition Sizing: Why Not Using This Strategy Is The Best Way to Lose Everything
Back when I was still managing money 10 years ago, I had a client who transferred in a rather sizable account. There was only one problem. Over 90% of his net worth was tied up in a single stock, Ericsson. He refused to use a trailing stop or sell a share of it or even to use a position sizing strategy.
I warned him it was crazy to have his entire financial future riding on one stock, especially since he was retired. “That’s what everybody keeps telling me,” he said. “But the stock keeps going up. I’m glad I ignored them…
11Aug2008 | Investment U | Comments Off | ContinuedBrush Up On Your Survival Skills: Simple Tips To Combat A Wild U.S. Economy
Whether The U.S. Economy Is In Recession Or Not, Maintain Your Perspective
Some believe the U.S. economy is already in a recession, while others point out that the definition of recession is two consecutive quarters of negative GDP growth which has not yet occurred.
Regardless, with healthcare, food and crude oil prices spiking, the average American is not as well off as he was last year. So how should you approach the current U.S. economy?
U.S. Economy’s Cycle
First of all, remember that our economy is cyclical, punctuated by highs and lows along the way.
And when it comes to recessions, they typically last approximately six to eighteen…
11Jun2008 | Smart Profits Report | Comments Off | Continued
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