Friday, June 23, 2006

The Wrong Investment Rules

Investment rules will get you in money trouble.

Percentages of this - success in that - fundamental trends - the type of fancy investment rules that lull you to sleep while your wallet is being emptied.

All of these are spoken knowingly by analysts on TV. The important point to realize is that analysts on TV work for investment companies - not for you.

If they suggest something, or provide an investment rule, it is to make money for their employer -- and themselves.

"No one cares more about your financial future than you do - unless they can use your assets to improve their financial future." - Allan Wallace

Mutual Funds tell you to invest for the long term - while they create short term profits with your cash.

There is an alternative.

Learn to manage your own money. Don't follow financial rules put forth by closet salesmen. Learn to speculate to protect your wealth. (financial analysts don't like speculation because you won't need them.)

Instead of investment rules use the principles of mass psychology.

Psychology is what moves markets.
-- How do you parse The/Masses?

The best independent market analysts use psychology in one way or another. Instead of investment rules they use procedures to limit losses when they are wrong - they speculate.

Go to a used book store or Amazon and pick up a book by Richard Ney or Doug Casey - the basis of their logic is psychology. Use Elliott Wave Theory, cycles, or Dow Theory - the basis of their long term success is the ability to recognize psychological patterns.

Make the study of group dynamics the key to your success.

As a first lesson in mass psychology bear in mind the description of the masses can be parsed as the/masses or far more accurately as -- them/asses.

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