“Fast Money” trader Tim Seymour wants to help investors avoid common money traps, so that they can be exposed to losses, especially in a volatile market.
He is out with a shortlist of four tips to deliver some peace of mind when things go south.
Tip no. 1: I don’t have more money on the market than you can tolerate.
Whether it is margin calls or fear of losing money that you cannot afford to lose, bad decisions are often made during despair.
Tip no. 2: I hope you don’t come back to Breakeven.
If you only hold a long position because you do not want to lose money in the trade, you run the risk of losing more.
Bottom Line: has a stock based on merit, not hope.
Tip no. 3: Do not assume that the investment direction of yesterday will work tomorrow.
Ask yourself: “Has something changed in the fundamental matter or is it a matter of market volatility?” If something has changed, make adjustments.
Tip no. 4: Do not cut your flowers and do not hold your weeds.
Often the companies of the highest quality will perform better in a downmarkt. Bad position? Circle back to No. 2.
To get more personalized investment strategies, Join us For our next live event “Fast Money” on Thursday 5 June in the Nasdaq in Times Square.