While continuing to believe that the market remains a challenging place 12-36 months down the road, as I mentioned previously, there will always be pockets of opportunity for short term investing.
For me, Short term investing can be 1 week to a year depending on how the stock performs, behaves, level of interest and underpinning fundamentals as well as prognosis on the external market environment. It means selecting your stocks carefully in well-timed manner as best possible and remaining nimble.
Active investing requires constant assessment of all those above-mentioned variables and have a keen eye on opportunities as well as looking out for risk factors and staying open minded.
For me, it is important
To recognise my mistake early on and take appropriate action (be it a sell or a buy) and never be in denial (if on the face of probability, I have been wrong)
To recognise that in one’s portfolio, there’s always Win and Losses and while most people would be quick to sell their wins early (rather than let them run) and hold on to their ‘dogs’ for clinging on to hope that they would somehow spring back, I’d prefer to cut my losses quick to minimise the damage and ride the good horse until it gets worn out. And it’s the overall position that counts
To never put all eggs in one basket i.e the virtue of diversification , the theory which we all know but commonly fail to adhere to or practise
To never fall in love with any stock – market darling one day could turn out to be a dog the next. Should always consider using stop losses
To be decisive and not procrastinate, as opportunities wait for no man (or woman) (this include opportunity to sell as with opportunity to buy)
To always be ahead of the curve in understanding the wider investing landscape, the risks ahead and having the preparedness to take protection when the situation calls for
To recognise that a paper WIN is just that, without realisation it can just as well disappear. And to recognise that a large paper LOSS can and should be avoided as normally they get bigger (when everybody recognises your stock to be a dog, no one will pay to buy it) and both involves opportunity cost.
To know a speculative buy from an investment and not to treat the former as the latter, while treating the latter as the former is ok (and consistent with short term investing)
To understand at all times where your stock sits in terms of Over or Undervaluation vis-à-vis its peers or on well-established financial metrics
To not make stock buying/selling decisions purely on tax considerations
To have an open mind and listen to arguments for and against any choice of investing/speculative stock
To read widely to gain the requisite knowledge to make better informed decisions.
To remember Buffet’s 1st rule of investing- to never lose money and the 2nd rule which is to never forget the first rule
The above are just sharing my thoughts re: my investing experience and is not to be construed as extending investment advice. My experience may not be similar to other’s personal circumstances and as such should be read in that light.
