Thursday, June 5, 2008

Position Yourself Accordingly...

Every once in a while, groups of assets fall out of favor and one needs to be able to pounce on the opportunity and commit enough capital to make a difference. One needs to set the entry low enough so one can start to dollar cost average down into the trade. Buying something is a commitment to constantly lowering the cost of a falling asset and holding it until sentiment rises. Ones ability to hold onto a falling asset over time can test ones will power to buy more, hold it, or sell it.... 

Every once in a while, groups of assets get too elevated and one needs to pounce on the opportunity and commit enough capital to make a difference. One needs to set the entry high enough so one can dollar cost average up into the trade. Selling something is a commitment to constantly raising the proceeds of a rising asset and holding onto it and hopefully being flat when sentiment falls. Ones ability to hold onto a rising asset over time can test ones will power to sell more, hold it, or buy it back...

And so it goes...

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