Avoid Emotional Trading Mistakes with TradeStops
When it comes to selling stocks, my dad is the worst. He hoards stocks and refuses to sell them. When he finally does sell, he does so without a strategy — completely at random.
This kind of behavior drives me nuts … but it’s more common than you’d think. Dalbar Inc., a research group, did a 20-year study of investor returns from 1995 to 2015. They found that, while the S&P 500 Index averaged 9.85% per year, the average investor returned just 5.19%.
The reason for that, they concluded, was this:
“Investor behavior is illogical and often based on emotion. This does not lead to wise long-term investing decisions.”
Taking Emotion Out of the Equation
This is where I come in. To help my subscribers, I spend 40-plus hours a week researching stocks. My team and I analyze the sectors, vet the companies and make sure the risk-to-reward ratio justifies buying the stocks. Most importantly, we manage our investments rationally.
One example of this is in our use of trailing stops. Trailing stops give us a rational, mathematical safety net. They tell us when to sell based on risk … rather than emotion.
Trailing stops helped my readers were able to secure gains of 25%, 40% and 70% late last year. They also protected us from huge losses.
Trailing stops are incredibly important. Without them, you can get cheated out of a lot of money. But following stops can be tricky. As life gets busy, updating spreadsheets with stocks’ closing prices every day can easily slip your mind…
The Good News
Thankfully, I’ve found a way for you to automate your portfolio management. It’s called TradeStops.
Built by Dr. Richard Smith, an old friend of mine, this service will automatically track your stocks and trailing stops without putting them in the market. It can even create trailing stops customized for your trading style.
I really can’t say enough about this service. If you’re tired of losing money but just don’t have the time to keep track of trailing stops, TradeStops is your solution.
So give it a try. You won’t regret it.
Matt Badiali, Editor,
Real Wealth Strategist