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Investment Minefields

Do you know that many listed stocks, and even worse for unlisted investments, do not perform well over the short-term or long term. It's incredible how much garbage is out there and is being hyped and sold by investment professionals. I have at least 200 positions that I follow and track on a regular basis and many of those positions just do not live up to their potential. It's an investment minefield out there. A common, but effective investment strategy is the "buy and hold strategy", but the recession that began in 2007, basically blew that theory out of the water. As a matter of fact, a "buy-and-hold strategy" may be dangerous in this market right now. However, here is an article in the Wall Street Journal on a star trader, working for a popular mutual fund, who has been really successful at not trading and basically buying and holding. I thought the article was interesting, but I do not think the article is entirely true. This trader may not trade as often, but he is still definitely trading and trading in a big way.
Therefore, before you make an investment in anything, have independent research, in addition to the information being provided by your broker or advisor. For example, as I was writing this article, I had a broker in Florida call me on a start-up currency fund that he and his firm was touting. He said, "the fund was part of an ETF strategy that is now a mutual fund." I was like "huh''. What the hell is he talking about? I told the representative to email me the fact-sheet on the fund; I received the fact sheet and was truly disappointed with its presentation and contents.

Use the available web-based search tools provided by the Securities and Exchange Commission to keep abreast of common or popular investment scams. Try the "Fast Answers" link on their site which can quickly provide answers to just about every legitimate investment term out there, along with other web-based search tools to help you find the information that you need to make a good decision. I use their site all the time when I am researching a company and its officers for a possible investment.

Finally, investment sites that allows you to build watch-lists are extremely useful, because these sites gives you a chance to follow a position before you make a financial commitment to the stock or investment. Follow or track the investment you are interested in for at least three months (90 days) before you invest.

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