What's going to happen next: Huge Losses?
I just received one of those alarming emails telling me of the coming Collapse of the U.S. Dollar and a stock market crash unlike ever seen before. It's a fine example of charlatan marketers using their knowledge of investor behavior to get our attention. You know, the ones that include statements intended to get us excited, like:
HUGE LOSSES!
It may be true that some people may once again take on heavy losses, should some of the alarming newsletter writers predictions come to pass. It doesn't seem to be working well so far, because the last one of these I got said to buy silver just days before its 30% decline. But, I can tell you I don't worry about things that haven't happened. A wise man once told me that people spend much of their lives worrying about things that don't ever occur. Because they worry, they experience those things over and over, even though it never happened. That is, you experience the things you fear the most over and over again by worrying about it.
Instead, I suggest you know what you'll do if it does, but don't wait around looking for it. For me, I'll just rotate out of those things that are falling into something that isn't. It's what I do. Predefine your risk by knowing at what exact point you'll exit if it's moving against you. Then, don't worry, be happy!
I take the active management of downside risk seriously as evidenced by my investment performance, and I'm telling you: that's exactly how I do it.
