12. Consider FOREX
Forex, foreign exchange, is trying to predict whether certain currencies, like the dollar, will go up or down against other currencies, like the pound or Euro. The beauty of it is, there are about 6 key pairs, and you can make money if it goes up or down, if you ride the trend. It is far easier than trying to keep track of dozens of stocks.

Again, do your research and decide what you can afford to risk. If you gamble it all away, you will have only lost a small amount, not your shirt.

These are the basics of asset management these days. There are of course other refinements, but this is the 40,000 foot view at present.

10. Watch out for signs of Market Wrecking:

Intentional Market Wrecking is done by rich and super-rich stock owners. It starts with the sale of some huge block of stock or portfolio. Such a sale will automatically start the entire market on a downward spiral.

The original seller can sop selling after a 5 or 10 point drop, once momentum has been established.

If a long term wrecking is decided upon, as in the 1929 crash, each time the market starts to rally, the rich and super-rich wreckers will sell short on other blocks of stock. Their resources are so great that they can keep doing this for years.

After a while, the frequency of attempted rallies will slow down as the market reaches a point of exhaustion. Margin buyers and those leveraged will be wiped out quite early in this process. Add bank failures, foreclosures on mortgages and other related financial reverses and you can see how a long term depression can be created.

Why would someone do this?
(1) because they can
(2) This is a way the rich and super-rich can remind everyone of the power they wield
3) The people who start this will stop selling early and “ride out” the crash they have created. Once the market bottoms out they can start buying assets at bargain basement prices and the big losers in the crash are all the small investors. Think of this as “A harvesting of the turkeys.”

Remember the words of John D. Rockefeller: “There’s no such thing as an accident. If something happens, you can bet that somebody made it happen.”

8. How you are making money

There is a saying, “You make your money when you buy. Not when you sell.”

This means that if you buy something cheap enough, you can’t fail to make money later when it appreciates and you decide to sell it.

Another idea is this: “It’s not money until you sell it. Until then, it is only marks on paper.” This is particularly true of stocks.

9. The Stock market, if and when to get out

If the market starts to drop, you have 2 basic choices. Get out or ride it out.

Remember that if you decide to get out, sell orders are not executed until the end of the trading day. So if you see a trend you don’t like at 8:05 AM EST and give the “sell” order.

During the day your stocks drop, say, 550 points. You will eat that entire loss because your sell order will be executed at the end of the day at the price of the stock at that time. Not at 8:05 AM EST at the price it was when you first gave the sell order.

A lot depends upon world news, and how you think the market will do over a period of weeks or months rather than on a single day’s performance.

If you are pretty sure there is going to be a long down trend, it is probably best to get out to stop the bleeding and then get back in when it bottoms out.

At the moment, the market is so volatile, it is probably best to dabble elsewhere. And all pointers say that things will not improve for some time to come.

7. Ask other people for advice

Do not be ashamed to ask people for advice or recommendations. Start with the people that you know. Ask friends or colleagues. If you know people who are good in business, approach them. They will be wells of information.

This is because they are probably doing their investing themselves and will know business investments that are really working well for them.

Plus, these people in the industry are the first to know about stock news and gossips; so you will have first knowledge of many of the trends before they hit.

Ask them what’s the latest stock that they bought or what investment opportunities they know that can yield a lot of money.

Even if they are not doing asset management themselves, they can probably mention a couple of companies or investment funds that their managers recommended.

This way, you are benefitting from asset managers’ wisdom and expertise without having to pay a high fee.

6. Avoid buying “on margin” and leveraging:

A big factor in the stock market crash of 1929 was buying “on margin.” This is a term meaning that a stock is bought on credit, where the buyer might put up 10% of the price and was actually taking out a loan for the other 90%.

After the crash, the US Government passed new laws to limit this practice, but it still happens.

Today there is another term, “Leveraging” which means that people use the equity in stocks they own (but may have bought on margin) as collateral for acquiring more stocks.

This is an extremely dangerous practice, especially for the small investor. If they do this, they are no longer risking “money they don’t need” but EVERYTHING they have.

A true story: In Florida there was a “small” investor whose portfolio had reached a value of one million dollars.

He was an active trader and the brokerage firm he was working through gave him his own office and computer setup.

But he was leveraged to the hilt, and didn’t really own much of anything.

When “Black Monday” hit, the brokerage firm gave him a “margin call” of about $20,000. This meant he had to come up with $20k to cover the full prices of stocks he had bought on margin. They must have known almost to the dollar how much cash he could get.

Once he tapped himself out to pay the margin call, they glommed onto the cash and immediately hit him with another margin call which he couldn’t even begin to pay.

So he realized that he was going to lose his entire portfolio, and there was nothing he could do about it.

He brought a gun into the brokerage firm’s offices and shot as many of them as he could before he shot and killed himself.

It was discovered later that he had been a criminal and was part of the witness protection program. This illustrates the dangers of buying “on margin” and “leveraging.”