Thursday, February 25, 2016

Cramer's rules for investing

Jim Cramer is one of America's most recognized and respected investment pros and media personalities. Following are some rules which he has given in his blog post for investing.

Rule 1: Bulls, Bears Make Money, Pigs Get Slaughtered
It's essential for all traders to know when to take some off the table.
Rule 3: Don't Buy All at Once
To maximize your profits, stage your buys, work your orders and try to get the best price over time.
Rule 5: Diversify to Control Risk
If you control the downside and diversify your holdings, the upside will take care of itself.
Rule 6: Do Your Stock Homework
Before you buy any stock, it's important to research all aspects of the company.
Rule 9: Defend Some Stocks, Not All
When trading gets tough, pick your favourite stocks and defend only those.
Rule 11: Don't Own Too Many Names
It can be constraining, but it's better to have a few positions you know well and like.
Rule 13: No Woulda, Shoulda, Couldas
This damaging emotion is destructive to the positive mind-set needed to make investment decisions.
Rule 17: Check Hope at the Door
Hope is emotion, pure and simple, and trading is not a game of emotion.
Rule 18: Be Flexible
Recognize and be open to the unexpected shifts in the market because business, by nature, is dynamic, not static.
Rule 24: Explain Your Picks
Buying stocks is a solitary event, too solitary in fact, so always make sure you can articulate your reasoning to someone else.
Rule 25: There's Always a Bull Market
It's OK if you have to work hard to find it, just don't default to what's in bear mode because you are time-constrained or intellectually lazy. 

To read his full post click here

1 comment:

Ravi Kumar said...

Very interesting blog to read...