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| Are You a Do It Yourself Investor? |
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Do You have What it takes to Do Your Own Trading?
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Investing in Individual Stocks or Bonds is not for everybody but consider it if you...
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Enjoy research tremendously or gain great satisfaction from it.
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If you choose to trade individual stocks and/or bonds you should enjoy or obtain great satisfaction from the process of keeping up with them.
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If it is a chore you will resort to quick decision-making steps that will quickly sabotage your portfolio.
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Feel comfortable learning about and understanding basics about balance sheets, income statements and at least a half-dozen common business ratios.
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Possess a good balance of dispassionate analysis, common sense and joyful curiosity.
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Are willing and able to commit yourself to checking up on each stock at least monthly and do a serious review of each one at least every six months.I dedicate about two working days each month to my research. I do not have any experience in bond trading and cannot recommend a time structure for monitoring.
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Are willing to give yourself a 3-5 year learning curve and can handle the probable losses both emotionally and financially.
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Characteristics of an Options or Commodities Traders
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Trading in options, commodities, precious metals, currencies, derivatives, hedging, et. all are high-risk investment choice that MAY be appropriate for those with the necessary traits. Not everyone, myself included, has the qualities needed to invest in these types of financial instruments.
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If you would like to do this you should, at the minimum, possess...
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A quick and agile mathematically leaning mind
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Ability to do dispassionate analysis
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Willingness to keep up with prices on daily (and in case of day-traders, almost hourly) basis
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A strong interest and excellent working knowledge of the area you trade in
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Willingness to read and keep up on developments in your area daily
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Financial ability to handle the losses inherent without taking out loans (margins)
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Ability to handle losses without taking it out on the people you know and love
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Tolerance for high financial risk
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