Thursday, August 11, 2011

Very Good Advice - 4 Rules for the Seesaw Market

The market roller coaster took another big dip down Wednesday, with the Dow tumbling more than 400 points midday before stabilizing a bit.

If you're like most non-professional traders, these kinds of wild market swings — down 635 Monday, up 430 Tuesday, down 400 Wednesday -- can be gut-wrenching, confusing and downright scary. (Rest assured, many professionals feel the same way - they just don't admit it.)

If You Can't Take the Heat, Get Out: As my Breakout colleague Jeff Macke likes to say, if the market is keeping you up at night, you shouldn't be in it.

Don't Panic: If you don't need the money in your retirement account in 5 years or less, you're better off sitting tight vs. cutting and running. Unfortunately, many investors simply can't take the pain and are doing just that.

Have a Plan: Sometimes the most boring advice is the best advice.
Investors who have previously established set patterns of portfolio rebalancing, diversification of investments and long-term goals for their money tend to do better -- both emotionally and financially

Learn from Your Mistakes:

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