This is a wide and varied topic.I have much to write here but I'm tied up this week with little time to write the lengthy discussion this topic deserves.
There are ways that people can make the very best of recourses they have to gain the maximum return on OPPORTUNITY.
Risk and Money Management are often talked about in the context of trading but hat about in line with our persuit of Financial independance?
Where do we go for guidance and advice?
My accountant who lectures in Tax Law and 2 friends who are Financial Planners---after 6 yrs are now bringing up the topic at social functions---prior to this I said very little and put up with rye smiles--knowing nods and tich tich as I ran various what if's past these "Experts".
My point here is that the "Experts" are in the same boat as you and I.
They may know the theory but just as in everyday life few are confident of their Risk and Money management structures to actually---
Do something with an opportunity!
I'm sure I'm not alone either with some of us who have planned and reaped the rewards---who KNOW---the steps to expand our ability to make the most of opportunity when it comes.To be able to put in place strategies that will limit risk and maximise return.
To us its simple as we have done it sometimes often and becomes second nature---to others its a mystery which alludes the Average person.
Not so I'm an average person.
To kick things off Snake Asked what I meant by this on another thread.
I still see your topic as a tounge in cheek swipe at the Housing thread.
Whether it be Housing or Stocks the sooner people get themselves in a position that hiccups even big hiccups have little effect on their investments,the more comfortable and more successful they will be in
Wealth Creation and Management.
When opportunities can be taken without stress from the participant there is no need to predict/theoriese or hypothosise.
When people can say --who cares if Property decreases 20% in 4 yrs and who Cares if the Stock Market corrects 50% in the next 4 yrs--then they have FULL control of their financial futures.
It can be done and some are doing it.
This should be everyones aim!
If I have enough gearing to be positivly geared and I have a passive income above that which I need to service all expenses--then interest rates and even declines in house value will have little effect.
Interest rates rise and fall even to extremes---as do housing prices.
Its the ability to identify/adapt and make use of opportunities that reap the returns and minimise the downside.
In Share Trading.
Same with Shares if your a long term holder then the benifit of a long term holding can and does ensure that in the long run even sharp falls have minimal impact on your overall financial position.
There are many stratagies to minimise negative impact---one is Trading profit only after holding for 12 mths.Lats say you traded CTX from $3.60---which we did with Techtrader.After 12 mths it was worth around $10.
You could have sold at a 6.50 profit and let the profits run.To lose all the profit CTX would have to be delisted.Now multiply this idea over say 20 holdings over a number of years. You would have a good portfolio of profit stocks in 3-5 yrs.Not long in the scheme of Financial Independance---is it?
Do you think market fluctuations---even crashes would have as much impact on you as those trading short term???----Always watching intently,the O/S markets--stressed to the MAX.
Snake I hope this makes the statement clearer.