Really there are 3 main strategies of investing

1. In-depth knowledge - you know the product and company inside out. This process can give you great results, but is very timely.
2. Technical analysis - makes use of ratios, such as Price/Earnings, Yield, etc. When using this method it is important to compare every ratio to a relevant benchmark.
3. Market timing - using "hunches" to make decisions. Very risky.

Watching stock performance, and day-to-day trends is #3. Using market timing you can make a lot of money, or you can lose a lot of money. The best method is the one that gives you the best overall picture - a combination of knowing the company, technical ratio analysis, and using fluctuations in the price of the investment to your advantage.

I bought into Evertz Technologies on the 17th of March. Overall, it has made me 36%, however today I lost 50 dollars on it. Am I going to ditch my best-performing investment because I lost some money on it? Hell no!

Kaseas

@htraey: You are so fundamentally wrong. All of the academic research that has been done on investing, along with the track records of the world's best investors--hmmm... let me think... Warren Buffet comes to mind--point to intelligent, long-term buy-and-hold as the best strategy for wealth creation.

In the long term, it's very simple: If a business is making money and growing, that business will succeed, and you might want to consider buying stock in that business. There's no magic formula, and the roller-coaster of short-term market sentiment historically has always--always!--succumbed to long-term fundamentals.

No one would suggest holding stock in a company that's crumbling. But getting out of a position like that is an emergency maneuver, and much different than short-term buy-and-sell trading.

Disclaimer: Past performance is no guarantee of future results. (LOL)

onesix18

I there a good site where you can make virtual investments to try it out and get the hang of it?

Is there a good site that allows you to buy and sell without huge fees. To me the per-transaction fees always looked so high that it seemed like i'd have to make huge gains just to break even.

Can you use, for example, US online trading sites from outside the US?

soul_grind

Peek in every month or so, but don't constantly check your investments.

Joseph

The tip about not checking daily holds not only for investments and weighing yourself (@vered), but also for site statistics. I try to ignore the daily fluctuations in traffic. The spikes are, unfortunately, too exciting to ignore.

Voyagerfan5761

People have a general bias when it comes to gain and loss: people feel losses more than they feel gains. The "feeling good" factor of gaining a dollar is less than the "feeling bad" factor of losing a dollar. Thus, if you track your long-term stocks daily, you'll have a net accumulated "feeling bad" vibe, even if you've gained net money. If you check your long-term stocks yearly, you'll probably have gained money, and you'll probably feel good instead.

Cyberscythe

Of course it's best to keep a cool head and not be too emotionally invested. However, being in the dark and ignoring your portfolio will not serve you in the long run. Pay attention to the companies and funds you've invested in. This takes time of course and it's an awful lot of very dry reading, so the other option is to pay a professional to put that time in for you.

skyesong

Make sure you have stop loss orders in place for all your stocks, just as an insurance policy, so you won't hold on to a falling knife, they have helped me more then hurt me, there are a couple of stocks that reached my price and were sold and in time went back up, but there were more which were sold and continued to fall big time.

BugMeNot

i can't say i have any spectacular success with which to back this up, but when i am thinking of buying shares of a new mutual fund, i tend to watch it on a daily basis and attempt to buy it at a low point.

i've never really understood why people make the "buy high, sell low" mistake. but maybe it's more common among people who buy single stocks, who might have more reason to suspect that the stock won't recover?

le_sacre

Low-cost index funds are great for long term.

Individual stocks? Not so much.

IamTCM

I agree with htraey: Buy-and-hold is a great way to lose money, at least when it comes to individual stocks. For most people, it is probably best to get a basket of various non-correlated ETFs.

yagameister

December 2007 - you know what i think would be a good investment honey? Bear Stearns. Jimmy got an internship there last year and he really liked it.

April 2008 - WHAAA!?!?!

Khamel

I completely disagree with this post. We're living in a short term world. Long term investments do make sense, but not often. Our markets are news driven, rarely do long term fundamentals make much difference.

For someone to neglect an everyday portion of their business is a odd strategy. I mainly hear this sentiment from individuals who make daily trades and depend on the "long term" investor to keep their money in the market to support price. Professional traders always bemoan the day trader for increasing volatility, but they themselves are nothing more than pro day/swing traders.

That doesn't mean someone should constantly move into and out of positions, but they should an idea of what sort of fluctuation they feel they can tolerate.

htraey

This is good advice. I don't react to my portfolio on a day-to-day basis (I buy and almost never sell), but I do update my portfolio value almost daily. The ups and downs toughen me up, and teach me to remain dispassionate about money.

onesix18

@phool: watch out for the short-term capital gains and trading costs.

@outtacontext: good thoughts, though you probably have more self-discipline and perspective than many.

rscotta

Having just rebalanced my stash I agree with this, but I also want to make a point: watching my investments helps me take ownership of them. They are ultimately my responsibility, not my broker's.

Too often people relinquish responsibility for their investments to their brokers. That can lead to trouble, especially if you subscribe to the notion that they make their living off of the trades they make for you.

My "investment counselor" (broker) and I have had discussions about strategy, especially strategy over the long term. As long as I understand this (and don't take the daily market fluctuations to heart) I enjoy following my investments, even daily. My goal is to have enough to live off of when I retire down the road.

Outtacontext

Good advice for the value investor, but it's harder and harder to make money with that strategy these days. Instead, consider reading up on micro-cap shorts and spend a good six months trading only with funny money to see how you do. Yesterday I made a quick $75 on a few cent drop. Watching the chart made it damn easy to see the stock was headed down, and even if it didn't I could get out for a very minor loss, then try again when things went my way.

I know shorts have a fairly bad rap as being pretty risky, but the small- and micro-cap world is the perfect place for them. Don't try to get returns with zeroes, just shoot for anything in the green and by the end of the month it all adds up to a pretty penny.

phool

what a lot of people tend to forget is that losses are only actually losses after you sell.

skwish

It's like weighing yourself daily, which often leads to trouble. Market fluctuations, just like weight fluctuations, happen. If you check too often, you lose sight of the big picture/ general trend.

vered