Burton Wilde's Approach to Stock Investing: Eight Critical Considerations

Burton Wilde's Approach to Stock Investing: Eight Critical Considerations

Three Pieces of Advice and Eight Considerations for Stock Investments

Stock market investment, much like life, has its ups and downs, joys, and sorrows. There’s no such thing as a ‘trick’ in stock market investment. Trading stocks is undoubtedly an activity that requires immense patience; either you commit wholeheartedly, or you quickly fade away. Whether buying or selling, one should calmly face the market’s fluctuations, patiently awaiting the right entry and exit points.

Three Pieces of Advice

1. Avoid Blind Market Entry and Investment: Successful investment in the stock market demands time and effort. For those who wish to make money in the stock market but are unwilling to study and analyze beforehand, it is advised not to take unnecessary risks.

2. Swift and Clean Stop-Loss: In the investment process, it’s impossible to make the correct choice every time. Once you detect signs of an unfavorable situation, initiate a quick stop-loss without any hesitation; otherwise, you may incur more significant losses.

3. Always Keep Some Cash: Never invest your entire net worth in the stock market. It’s advisable to always keep some cash on hand. Additionally, consider using some earned profits to trade potentially recovering ‘junk stocks.’

Eight Considerations

1. Don’t Attempt to Buy at the Lowest Point and Sell at the Highest Point: Trying to buy stocks at the lowest point and sell at the highest point is a common psychological trap. You can’t accurately predict whether the next moment will see an increase or decrease in stock prices. Sell when you think the price is right, without excessive greed.

2. Never Chase Highs: Avoid chasing after stocks that are currently popular in the market, regardless of how attractive their upward trends may seem.

3. Seek Low-Priced Quality Stocks: As an ordinary investor with limited funds, buying too few shares at high prices can compress your profit margins. It’s recommended to look for reasonably priced high-quality stocks.

4. Choose Stocks with Good Fundamentals: Before purchasing stocks, conduct a fundamental analysis. Avoid stocks with poor performance; invest in those with no adverse records and decent business operations.

5. Diversify Your Portfolio: Never put all your eggs in one basket. For stock investments, consider simultaneously choosing several different stocks to buy. Sell the ones that perform well and buy more of those that have dropped, practicing the strategy of ‘high sell, low buy.’

6. Limit the Number of Stocks: While diversification is important, having too many stocks is not ideal. It’s recommended to control the number of stocks to around 9, as having too many may overwhelm your ability to observe and manage them effectively.

7. Be Skeptical of ‘Inside Information’: Do not easily believe so-called ‘inside information.’ Whether the source is a waiter in a restaurant or a learning figure, maintain a skeptical attitude.

8. Avoid Frequent Trading: Frequent trading can lead to impulsive decision-making and the tendency to chase small profits. Maintain sufficient patience, don’t be overly concerned about minor fluctuations, and avoid taking action immediately after buying. Wait patiently for the right opportunity to act.