5 Lessons that will Help Protect Your Portfolio

Market Crystal BallOne of the fascinating things about the market is that, no matter how long you invest, or how much you think you know, there can always be new lessons learned. For a lot of investors, losing money โ€” unfortunately โ€” is often the cost of tuition for these market lessons. But, no investor is going to bat 1.000, and if you can at least learn from your mistakes then your portfolio will, most likely, be better off in the future for them. That being said, letโ€™s look at some lessons investors should have been paying attention to over these past few hot months (both weather-wise and market-wise).

Short sellers can sometimes be VERY right

Shareholders in Valeant and Concordia International know this all too well.ย  Read More…

This article has 9 Comments

  1. Irwin Sloan

    Lessons that everyone should read, learn, and practice. But as the article points out that you need to get burned a few times before it becomes mantra.

    My biggest mistake was following the advice of my neighbor and jumping in to the deep end with $20K only to lose it a few weeks later in a panic selling, losing abot 65% of the principal. And worst part is 4 months later it rebounded and went to record territory. It was at that point i would stop taking advice and learning how this mysterious market worked.

    Granted i am not that much better at picking winners but i at least have stopped hemorrhaging losses.

  2. Bret Selover

    Uh debt isnt always bad. Debt can be leveraged quite well for a business. Remember that debt allows a business to have a lower equity base boosting after tax profit/equity return rate. Helps when figuring out earnings per share.

  3. Olley N

    And here i always thought OTC was just another name for Nasdaq trading. Didn't realize it was another thing entirely.

  4. Brandt Cram

    I sitll don't get how short selling works and why stock sites dont make it obvious on how to do it. Is it for big traders?

  5. Wendel

    Rule #1 – Diversify. No other rules. Profit.

  6. Malik

    Although its true that cheap stocks probably should be avoided there are a number of quality picks out there. You just have to do more digging into their numbers to ensure you aren't sitting on a time bomb. Do your research.

  7. Laurie B.

    Well, from my experience the biggest lesson is to not panic. Most people end up buying or selling on emotion. They hear/see that a market is up for so many consecutive weeks and then wrongly thing that it will continue to rise. The same is true for when selling. The first sign of a loss they think they need to sell all of it. Don't fall into the trap.

  8. Harsimran T.

    Ahh yes Concordia. Where would financial sites be without their darling punching bag.

  9. Emiliano La Garrigues

    Nothing to add. Just wanted to see if my current investment knowledgebase was up to par with what is out there. ๐Ÿ™‚

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