Rule #1: Don’t Lose Money
This is Warren Buffet’s first rule for investing. Yet, what does Wall Street do to accomplish this goal? What does buy and hold do to accomplish this goal?
If you practice buy and hold, you have no defense against heavy losses.
Yes, diversification may provide minor protection against bear markets. But a bear market means that the vast majority of equities are falling, so simply being diversified offers very little actual protection.
The fact is that the ability to sell is our greatest defense against losses. This is the basis of our strategies at Smart Chart Investor.
Our first priority is protection. We employ proven sell strategies to capture gains and/or avoid losses.
Many (like John Bogle) will point out that active management is a recipe for disaster for the average investor. They would be correct.
The average investor who attempts to “time the market” is using pure guesswork, often buying near the peak of an upswing and selling near the bottom of a downtrend.
What we practice at Smart Chart Investor is a proven strategy built from three decades of experience, trial and error, research, and hard fought gains and losses.
We choose low risk entry points and only act when major, long term indicators compel us to. And you will know exactly why a buy or sell signal was triggered, giving you the confidence to make the right decision for you and your portfolio.
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