Remember this sentence, “the only thing we have to fear is fear itself.” The fact that there is risk involved in profitable investing shouldn’t cause fear, shouldn’t scare anyone away.
Eliminating risk that’s a key to safe investing. In fact if it weren’t for “risk” more people, perhaps you, would be active stock market investors.
There are the ways to help you to reduce the risk, to limit the loss of money when you invest in stocks, ETFs or mutual funds.
Working with an investment program that offers a Market Exit Signal (ME) is just one way for you to reduce the risk. The ME that i use is based on the equity curve of the stock market. First, i learned about an equity curve and how it can tell you when an investment strategy is failing or the markets are tanking when I read Mike Carr’s book, Safe Profitable Investing with Relative Strength. Like many things in life, it is almost a hidden gem in his book, but so very powerful it kept me from losing my shirt when the markets dived during our recent recession.
There are other ways to reduce risk and thus to eliminate the fear of investing.
A good investment program will offer one if not many ways of reducing risk. Some of these include:
📍 Stops – sell signals when an ETF drops a certain pre-set percentage or dollar amount
📍 Rank decline – sell signal based on a funds position in rank when compared to other funds’ performance or relative strength ranking.
📍 Equity Curve – performance of a stock when compared to either the market as a whole, against its own history, or the performance of your investment strategy itself.
The important fact to keep in mind is simply that risk always exists in everything, everywhere, always. This means you, anyone, can grow your income, build a retirement account safely and profitably without worrying about losing your hard earned money.