Vance&8217;s rules for six figure investing

Updated: Dec 2nd, 2013 | |
  • Big moves usually don&8217;t happen in a day, be patient
  • Don&8217;t fight the market
  • Consider not jumping in or out all at once—no matter which way the market goes there will be something good to be said about it (e.g., at least I got half out&8230;)
  • Regardless of the market trend the chances of an up day tomorrow are always fifty-fifty (post)
  • Don&8217;t buy at the daily high, at least wait for a retrace
  • What is the upside opportunity vs the down side risk? Do the math!
  • Risk always goes up with increasing reward—the market is very efficient in that regard
  • You have to take a position on market/stock/ volatility direction—that&8217;s the hard part
  • Don&8217;t try to pick the top, or the bottom—as Joe Kennedy said &8220;Only a fool holds out for the top dollar&8221;
  • The past does not predict the future—this is basis of technical analysis and it&8217;s a mirage.  Charts show psychology, not forces of nature.
  • The macro moves in the market are best understood as the ebb and flow of fear and greed
  • Markets will move—that much is certain
  • Resistance levels and trend lines are real—because others believe in them
  • Black Swans kill positions that are short volatility (e.g., covered calls)
  • If you have realized 80% or more of the available profit in a position, close it out.  You&8217;ll hate yourself if you let that slip away.

Monday, December 2nd, 2013 |