My years of wisdom playing the stock market.
Eugene’s Approach to playing the stock market.
- Pick only a handful of stocks. Don’t worry about the whole market. Pick only those companies that you know and understand.
- Buy and Sell in increments. Don’t put all your money in one stock all at the same time. You can never buy in or sell at the perfect price.
- Don’t worry about daily price fluctuation. Concentrate on long term.
- Zero is the hero. If you have 0 growth, that is ok. Just don’t go negative. It’s much harder to come back if you start off being negative. It’s ok to keep your money in cash and wait.
- You haven’t made money (or lose money) until you sell.
- Keep it simple. Don’t play with margins or options.
- Use multiple accounts with different tax implication. Understand before tax and after tax investments. Use after tax investing when you are more certain. Use before tax investing when there is uncertainty.
- Maximize Roth. Roth is after tax investing. Max it out every year at the beginning of the year.
- Don’t try to predict the market, just react to it. Don’t try to predict what the stock market will do. Just know what you need to do when the market does up and what you need to do when the market does down.
- If a stock goes up a lot in the morning hours, it will probably go up even more during closing hours. Sell later during the day.