Discipline

One of the great "secrets" of successful people is discipline and it doesn't make any difference whether it is manufacturing, processing, servicing or investing in the stock market.

Before you can have that discipline you must have a successful plan and stick with it. If the method you use does not work or results in smaller profits it should be abandoned and a better one found. For the average investor the plans laid out by Wall Street do not work and over the long run you will lose money. Actually you will make a very small percentage, but the return will be mitigated due to ongoing inflation. The great majority of investors believe that an annual return of 10% or more is to be expected when actually it is much less and there will be periods when there will be almost no return at all.

Returns can be increased greatly if the investor will learn not to follow the 3 great lies of Maul Street. They are Buy and Hold, Dollar Cost Average and Do Research. These lies have been told so often that they have become conventional wisdom.

During 1998 and 1999 the price appreciation was fantastic. If you check back in history you will find this was an aberration. Folks still think that was "normal". The actual norm is about 16 to 18 year periods of bull markets followed by bear markets with many 4 year cycles of ups and downs with that 16-year time frame.

Think back to 2000, 2001 and 2003. During that time did your broker ever call to tell you to sell? About 98% of brokerage company recommendations were to Buy. Many folks lost 50% to 80% of their savings. That alone should have turned on the light bulb in your head that either these guys are stupid or they are lying to you.

There is a "secret" to investing and it is one word ? Sell. You must have to discipline to remove yourself from losing positions. During the worst part of that 3 years we saw many stocks drop 50 to 90% and other companies go out of business. It you have placed a limit to the amount of loss you would take you would have a lot more money today. Why do you want to wait for your stocks to drop 30, 40, 50% or more when you could have placed an Open Stop Loss Order with your broker to sell you out if your stock dropped below a certain price? Maybe 10%, hopefully not 20%, but even that is better than a huge loss.

In many cases brokers try to talk you out of selling, but your discipline will require you to be firm. You must protect your money; insist on protection of your investments.

Al Thomas' book, "If It Doesn't Go Up, Don't Buy It!" has helped thousands of people make money and keep their profits with his simple 2-step method. Read the first chapter at http://www.mutualfundmagic.com and discover why he's the man that Wall Street does not want you to know.

Copyright 2005

In The News:

Here are the mutual fund favourites in April  MoneycontrolMaximum month-on-month change in value was seen in TCS, ICICI Bank and Kotak Mahindra Bank.
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What political leaders invest in: Mutual funds, Reliance shares and even Kingfisher Airlines  Economic TimesShares of Mukesh Ambani- led Relaince can be found in the portfolios of several leaders.
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How to Find “Pre-IPO” Marijuana Stocks  Investorplace.comYesterday, we began a special two-part series from Matt McCall, editor of Early Stage Investor. In Saturday's essay, Matt discussed how getting in early and ...
3 Mining Stocks for Investors Seeking Gold Exposure  ETF TrendsAs the U.S.-China trade spat drags on, so too could the stock market volatility that has accompanied it so far this month.
What Makes Berkshire Hathaway Shares Better Than an Actively Managed Mutual Fund?  Motley FoolTo start with, the company is a lot more than Warren Buffett's carefully selected stock portfolio.
Validea's Top Five Consumer Cyclical Stocks Based On David Dreman - 5/26/2019  NasdaqThe following are the top rated Consumer Cyclical stocks according to Validea's Contrarian Investor model based on the published strategy of David Dreman .
FOMO? Investors Fear Missing Out As Companies Stay Private For Longer  Seeking AlphaMany companies are staying private for longer before deciding to go public - if they do so at all. But what does that mean for investors? The type of gains many.
TD Ameritrade Cuts Fees on ETF Trades in Further Blow to Mutual Funds  TheStreet.comAs competition heats up in the exchange-traded funds industry, TD Ameritrade nearly doubles the roster of ETFs eligible for commission-free purchases....BLK.
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Top 10 stocks that mutual fund managers bought and sold in March 2019  Moneycontrol.comData for equity flows into mutual funds for March came as a breather after a weak February. An increase in net inflows in equity and income category led to the ...
What India's top three mutual funds bought and sold in March  Economic TimesIndias largest money manager held 1.5 trillion rupees in equities.
Stocks post decade-high weekly gains  DAWN.comKARACHI: Investors heaved a sigh of relief as the stock market posted recovery after snapping the seven-successive-week selling spree that had seen the ...
Can mutual funds give multibagger returns like stocks?  Economic TimesStocks can be multibaggers. They can offer extraordinary returns in a very short period. Can mutual funds ever do that? This was a question thrown at Rajeev ...
Govt tweaks rules, increases limit to disclose investment in stocks, mutual funds for employees  Economic TimesNew Delhi: The Centre has increased the over 26-year-old monetary limit on disclosure of investment in shares and mutual funds by employees to six months of ...
I want to invest Rs 1 crore in stocks and mutual funds for 5 years. How should I invest?  Economic TimesYou may consider the following asset allocation: 40% in large-caps; 40% in large and mid-cap, or multi-caps; and remaining 20% in mid- and small-cap funds.
Active mutual funds fail to reflect index gains  Economic TimesThe Nifty, which has hit all-time highs for the second time in April, has advanced 12% in the last one year. But these gains are yet to reflect in many mutual funds' ...
Stock investors switch to fixed-income avenues  The Express TribuneLatest monetary policy has tipped balance in favour of fixed-income investment.
7 stocks most favoured by mutual funds over last one year  Economic TimesAs the markets hit a speed bump, stocks favoured by mutual funds appear to be safer bets.
Mutual funds or direct equity investment – which is better?  Economic TimesOne big question that often dogs investors is which investing option should they opt for: mutual fund or direct equity? Katalyst Wealth's Ekansh Mittal ends your ...
Mutual Funds increase holding in ‘attractively valued’ oil & gas stocks  Economic TimesMUMBAI: Mutual funds have been adding shares of oil and gas companies such as GAIL, HPCL, BPCL and ONGC over the last few months, encouraged by ...
Mutual funds shooting themselves in the foot?  Economic TimesWhat if banks take a leaf out of Kotak and HDFC Mutual Funds' decision to direct investors to come another day to get their money instead of paying them on the ...
Mutual funds bet big on these 30 stocks in November; do you own any?  Moneycontrol.comThe Indian equity market rose about 5 percent in November but what was more heartening to see was inflows into mutual funds. Investors pumped Rs 1.4 lakh ...
Mutual funds sell several blue chips stocks, buy mid-caps in March  Business StandardDomestic money managers were seen pruning their holdings in several blue-chip stocks, including Reliance Industries (RIL) and Housing Development Finance ...
What top 5 money managers bought and sold in February  Economic TimesFebruary was the fourth consecutive month of decline in net investment into equity mutual funds.
Quantum Mutual Fund uses cash pile to buy stocks cheap  Economic TimesQuantum Long Term Equity Value Fund, where value investing is the pronounced fund allocation theme, has brought down the level of cash at its plan to the ...
27-year-old rule changed: Disclosure limit on MF, stock investment up for bureaucrats  Economic TimesGroup A and B officials had to intimate government if total transaction in shares or MFs exceeded Rs 50K.
Here’s a better tool to judge mutual fund performance than simple 1-year, 3-year returns  Economic TimesOne invests in mutual funds to earn potentially higher returns than those in traditional investment products, and I'm sure everyone looks at the one-year, ...
Why your core equity portfolio should be in index mutual funds  Economic TimesInvestors flock to the performing fund “after” it has beaten the index. Fund selection is not an exact science, and there will be hits and misses.
What top mutual funds bought and sold last month  LivemintMumbai: Inflows into Indian equity mutual funds in January were the smallest in two years as heightened market volatility and political uncertainty cooled ...
Should I increase investments in mutual funds once I have more money to invest?  Economic TimesI am a 19-year-old student. I want to invest Rs 2,500 per month in mutual funds for 7-8 years. Can I increase the investment amount with time—once I have more ...
These are fertile grounds for long-term stock pickers, says Samir Rachh of Reliance Mutual Fund  Economic TimesSmall cap funds are going through a rough patch after a bull run in 2017. etmutualfunds.com spoke to Samir Rachh, fund manager, Reliance Small Cap Fund, ...
Check out what top five mutual funds bought & sold during October selloff  Economic TimesNEW DELHI: Mutual funds stood resilient as industry's asset base increased to Rs 22.23 lakh crore in October in spite of a heavy correction in the domestic ...
New SIP investors feel the pain as equity fund returns disappoint  Economic TimesSip by sip: That's how the average Indian had a taste of equities in the past couple of years. But the steady road to riches, which involved monthly mutual fund ...
Mutual funds garner over Rs 65,000 crore in Jan  Economic TimesMUMBAI: The mutual fund industry added assets worth Rs 65,439 crore in January 2019, taking total assets under management to Rs 23.37 lakh crore.
Why it is a bad idea to always look for outperformers while investing in mutual funds  Economic TimesOne of the most important features that any investor, wealth adviser or anyone in the financial media looks for in an investment product is its track record in ...
Mutual funds may need smart bets on smallcap stocks to beat ETF show  Economic TimesSmallcap stocks could see up to ₹1 lakh cr inflow as fund managers look for potential winners: Analysts.
How stocks picked by mutual funds over 2014 to 2017 have performed  Economic TimesWhile the most wanted stocks of 2014 and 2015 have done well, the recent picks have disappointed.
Debt mutual funds with Zee exposure send investors into a tizzy  Economic TimesMUMBAI: Worries about the prospects of debt mutual funds holding securities of Subhash Chandra's Essel Group entities have resurfaced after Kotak Mutual ...
Diversify equity portfolio with international funds  Economic TimesAs a part of diversifying your equity portfolio, wealth managers believe investors should diversify geographically using mutual funds. They can do this by ...
How income from stocks and mutual funds are taxed for an individual  Moneycontrol.comCapital gains from transfer of unlisted share are considered as STCG where period of holding is less than or equal to 24 months, and LTCG when holding period ...
BJP’s Amit Shah has diversified stock investment portfolio; Rahul Gandhi prefers mutual funds  Economic TimesShah held shares worth Rs 17.56 cr as of March 22, while Gandhi has MFs worth Rs 5.19 cr.
Three large mutual funds opposed to L&T’s takeover of Mindtree  Economic TimesMUMBAI: Three large mutual funds holding shares of Mindtree are opposed to L&T's hostile takeover attempt of the mid-sized software company.
Flows to equity mutual funds rebound as rally spurs risk appetite  Economic TimesStock funds took in about 118 billion rupees ($1.7 billion), the highest since October.
Mutual funds' exposure to banks hits 3-month low of Rs 1.88 lakh crore in Sept  Economic TimesMutual funds' holding of banking stocks declined by over Rs 21,600 crore to Rs 1.88 lakh crore in September, driven by the correction in equity markets.
5 funds that outperformed the recent surge in Nifty returns  Economic TimesEquity markets have seen a strong rally on the back of strong flows from foreign investors and hopes of the NDA-led coalition coming back to power. The Nifty ...
Financial planners recommend new fund from Mirae Mutual Fund  Economic TimesConsistent performance of the existing equity mutual fund schemes at Mirae has prompted financial planners to suggest the Mirae Asset Focused Fund to ...
As equity mutual funds' returns turn negative, debt outperforms  Economic TimesGains of 13% in the Sensex have not benefited equity fund investors, for whom returns in traditional debt funds investing in government bonds may have been ...
Top 30 stocks that fund managers bought & sold in March; do you own any?  Moneycontrol.comData for equity flows into a mutual funds for March came as a breather after a weak February. Increase in net inflows in equity and income category led to the ...
What India's top three mutual funds bought and sold in February  LivemintMUMBAI: Inflows into Indian equity mutual funds in February were the smallest in more than two years as savers held back investments amid market volatility ...
At least 100 MF schemes own these stocks; that should mean something, right?  Economic TimesDomestic institutional investors have become one of the key market drivers in recent years.
Best mutual funds to invest in 2019  Economic TimesOur list of top mutual fund schemes that you may consider to invest in 2019.
What India's top three MFs bought and sold in January  Economic TimesStock funds took in a net Rs 6160 crore, the least since January 2017.
Top fund houses are busy lapping up PSUs; what’s behind this new-found love  Economic TimesNEW DELHI: India's top three mutual funds, which manage over Rs 9 lakh crore in debt and equity assets, added a number of PSU stocks to their schemes in ...
Should you shift from large-cap mutual funds to index funds?  Economic TimesThe index fund category of mutual fund schemes is slowly gaining traction among investors. The fortunes of index funds are changing as not only are they being ...

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