Best Investment plan; It all begins with a good strategy in place
Best Investment plan; It all begins with a good strategy in place

Best Investment plan; It all begins with a good strategy in place

Best Investment plan

What’s The Best Investment plan

You need to have some sort of strategy in place and contrarian investing is a good place to start at; the concept is simple and easy to understand.

The first thing is to make sure you understand the difference between contrarian investing and Fashion Contrarian investing.  These contrarian investment guidelines by no means encompass everything one needs to know about trading, but it can seriously help you become a better trader/investor.

Use Popular Media As a source for Contrarian Data

All popular magazines, news articles and TV stations should be used only for obtaining information that you don’t plan on using; you use this information to find out what the masses are doing.   For example,  if they tell you its time to buy gold, its time to get ready to sell if they tell you the market looks like it’s going to crash, we are probably close to a bottom etc

 The best investment plan should have a technical analysis component in it 

Spend time learning Technical Analysis; this is very important. We have just updated the investor tools section on our web page. There are many educational resources there now, so use them it cost you nothing and took us time to put them up. Free Trading Resources

 Profit and loss strategy is essential to minimise your loses & maximise gains 

Have a plan. only fools buy or sell stocks without a plan. The plan should include profit targets on each and every trade, plus and this very important, an exit plan, in case the trade does not work out.

Avoid  Investing in options until you bank some profits

Do not deal with options until you are sitting on a decent amount of profit and even then tread slowly and cautiously. Remember the saying “A fool and his money are soon parted”; if you tread cautiously and start off with small amounts of money,  options are absolutely fabulous instruments to lock in spectacular profits.

Investopedia agrees with our take on options; this is what they have to say

So, is options trading risky? If you do your research before buying, it is no riskier than trading individual issues of stocks and bonds. In fact, if done the right way, it can be even more lucrative than trading individual issues.

But it all comes down to whether or not you did your research. If the research points to the stock increasing in price soon (hopefully before the option expires), then you can buy a call. If research points to a stock decreasing in price, you can buy a put. If the research points to the option staying about the same, you can sell a call or a put. Full Story  You can’t have a so-called best investment plan if you think the key to investing is hitting home runs; adopting this strategy is a recipe that will put you in the dog house. Focus on sure but steady gains, to begin with, and then use a portion of the profits you generate to speculate in option.

Money Management 

With proper money management, one could lose his entire options portfolio and still walk away with a profit.

We will use a 100K portfolio for this example

10% is 10K

Okay, you lose the entire 10K by playing options idiotically.

Now you play nice and safely with the other 90K and you make 30% for the year. Don’t say it’s not possible; all of you who have long-term positions in Gold is up more than 30% this year alone. Just catch the major trend and follow it. So you make 27K so you know have a total of 117K, but let’s say you make only 20% that brings the total to 108K, you could even make 15% and still walk away with a profit.

The key here is that you live to fight again and then you can take some of these profits and play options once more

The most important factor to remember is that all stock market crashes or strong corrections should be viewed through a bullish lens from a long-term perspective.

The stock market is not static it’s dynamic

In addition to the above essential rules of contrarian investing, investors would do well to read the following new notes.  Investing is not a static field; it’s a dynamic field, and you have to be in it to win it. In other words, just sitting on the sidelines hoping to gather all the information via theoretical models will only work well in an intellectual environment. Real-life and actual market action is an entirely different beast.  Start small, learn from your mistakes, keep notes and when you start to trade successfully slowly increase the dollar amount of your investments. So the best investment plan starts with having the right mindset and some skin in the game, otherwise, you will fall under the category of all talk and no action.

An accurate measure is that you buy because the price is at mouth-watering levels, it’s in a strong sector, and you checked the charts. Your purchase passes the necessary technical analysis tests.

One key point to remember is that even though everything looks good, you should still be nervous or scared. You should be saying something like this, “Hey, am I the only one buying. I don’t want to go against the crowd. A true Contrarian always feels this fear, and you have to fight it, and say, “Now is the time to buy.”

Arrogance is dangerous

When you are overly confident (arrogant), it’s time to flee.  Even the best can be taken out. Keep your mental stops tight in this volatile market. Let me expand on the subject. If you are going to formulate the best investment plan, there can be no room for arrogance in it.

When you take a position and people look at you with disdain or shock, you know you are doing the right thing!. When they pat you on the back or the rear, it’s time to flee for the exits Gold and silver and commodities are still hated with a passion. Therefore, one has to understand that the massive hate for this sector makes it the best contrarian play ever. Get it? Buy low. Sell high.

Finally, we hope that these contrarian investment guidelines prove to be useful to you now and in the years to come.

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Contrarian Round Table III- Inflation good or bad?

Contrarian Round Table IV- Bear Market Etiquette

Contrarian Roundtable V- The Fed 

A day late and A Dollar Short

Intro to Futures Trading

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