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Friday, October 23, 2009

Investment Series: The Risks and "Risk Defense" (VIDEO)

"If a man is alive, there is always danger that he may die, though the danger must be allowed to be less in proportion as he is dead-and-alive to begin with. A man sits as many risks as he runs." - Henry David Thoreau

This video is part of a series I have entitled the "Investment Series"

Here is a list of the various entries in this series.

1) The Introduction to this series. It's just that. The introduction to the series overall. On this blog, I have a lot to say about trading, and trading for a living. This series purpose is to discuss investing, not trading.

2) Buy and Hold is not dead. It's something that's been bandied about in this economic downturn. I examine that line of reasoning in this entry.

3) The "Dogs of the DOW" approach. This is the kernel of my investment philosophy.

4) Investing Vs. Trading. I discuss the exact differences between investing and trading.

5) The importance of dividends. I am a dividend investor. I begin to examine dividends in this entry.

6) What Sort of Dividends?. I discuss the nature and type of dividends that I search for, as a dividend investor.

7) DRIP or Dividend ReInvestment Plans. DRIP's allow your dividends to begin to compound the returns on a single purchase.

8) Infering Bias - By Seasonal Factors. There are particular times of the year, that you may want to think about buying dividend stocks; so as to get the best price.

9) Infering Bias - by Dollar Cost Averaging. What is Dollar Cost Averaging, and how can it assist you to obtain a stock at a better price?

10) Infering Bias - Scaling. An entry dealing with the allocation of your accounts cash, and how to slide into positions.

Today we're going to expand on the last entry. We finished up the discussion about scaling, by stressing the need to always, always have excess cash, and how this can defend you against the very real risks of the capital markets.

(Video Included. If you're seeing this entry elsewhere and cannot see the Video? Click here to view the exact entry ...)

Here is the link to the blog entry that I mentioned in the above video:

"Why Bears Always Have the Best Arguments" by Paul Kedrosky.

So again, the best defense is to have cash, and other cash flow businesses. As I mentioned in the above video? This is why I am also a trader.

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Note: This is not an investment or trading recommendation. The losses in trading can be very real, and depending on the investment vehicle, can exceed your initial investment. I am not a licensed trading or investment adviser, or financial planner. But I do have over 13 years of experience in trading and investing in these markets. The Challenge accounts are run for the education of other traders who should make their own decisions based off their own research, and tolerance for risk.

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