I have a method for investing in the stock market. This is not my normal TIAA=CREF retirement but just a few bucks that I took from my savings account. I buy a stock for about $1,000 or 1,500 and then wait. If a stock does very well, earning me at least 1,000, I sell that thousand off and buy something else, thus diversifying my risks. I have done that 3 times in total, twice with my best performing stock. I also reinvest all dividends.
The other way would be to cash in on any substantial gains, removing that money from the total pot. But money just sitting in the bank loses its value to inflation so that is a guaranteed loss.
If a stock does poorly, or gains more slowly, I just let it ride indefinitely. Since there is a transaction fee for selling and buying, I have to factor in that before I know I have made money. That fee also makes me more disciplined in not doing a lot of smaller trades.
With one mutual fund, I buy $50 dollars automatically every month, or $600 a year, so my total stake increases there. If the market is doing worse, then I am buying this fund at a lower cost.
If I needed money for an emergency beyond what I have in the bank, I could sell a stock that has done well, but not too well. The most I would lose with the total bankruptcy of a single company would be about 1,500 of my original investment. This is a form of very conservative gambling. You don't lose the bet unless you are obliged to sell an asset for a loss, but you can always win by selling an asset that has gained value. That means that the trick is not investing money that you need to use right away.
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