Are You A Risk Taker or A Conservative Investor?

Discussion in 'Trade Journals & Stock Tips' started by gracer, Nov 27, 2015.

  1. manoharb

    manoharb Senior Investor

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    I'm aggressive trader, never thought about long-term investment.My Philosophy is, Grab profit and leave that place, stock is not your wife with whom you want to stick together whole life. I want profit now, If i failed to make that, I find my mistakes and covers risk in no time. more knowledge and improvisation, automatically controls Risk.

    I already wrote in previous comment, stock market is not about only making money. stock market taught me many things. Neutralizing Risks is 1 good passion and skill, maybe it's life or stock market. where is risk, there is 1 new lesson for you also. I love risks and that's the reason, I always like to be an aggressive investor.
     
  2. anders

    anders Well-Known Member

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    I kind of agree with this in some ways, and there's definitely a corollary to it which is that holding onto stocks for a long time is actually a risk in-and-of itself. People think that the buy-in price will always return at some point, and there's absolutely no guarantee of that. Holding stock for a long time actually increases overall risk to your investment, rather than minimizing it. It can seem paradoxical, but it is very often true.....
     
  3. crimsonghost747

    crimsonghost747 Senior Investor

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    Actually holding on for a long time usually decreases risk as you are reducing the effect of things that have nothing to do with the company itself. Yes if you pick a bad company then of course the longer you hold on the worse it can get but if you have a company that manages to keep both a positive EPS as well as a positive free cash flow then time is only your ally since the company is making a profit all the time.

    On a historical, long term view, there is absolutely no way you would have lost money if you invested in something simple like the s&p500 index. In fact, even after the recent declines, any buy you made before May 23rd 2014 would be in the profit.
     
  4. manoharb

    manoharb Senior Investor

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    yes, I agree with you. I'm Future and Options trader and I'm making good profit in FNO. In Equity, 1000$ can't become 2000$ in 1 day ( Some rare exceptions in mid-cap or penny stocks). For example,In Equity, In 1000$, I can buy only 10 shares of Apple and 10 points movement can give me only 10$ profit. but, In options, I can invest 200-500$ amount and double it in 1 day or 1 month. Huge Risk in FNO , but reward is also big. depends on analysis skills.

    I can see here, DowJones can touch 15201 this month and in rare case, it can touch 16700. most chances of 15201, In such case, I will hedge and book profit time to time. why to think about equity and long-term ? when you already knew targets and risk. you can make huge money in FNO. In Equity, margin trading is also dangerous. but, in options, you already knew Risk and you loose limited amount. Just invest 20-40% of capital and make money. keep 60% as reserves or for back-up.

    some traders try to average in stock market, averaging is also dangerous game.If you knew nothing about Technical analysis, never average. I'm NSE trader, Today, my 1sl. triggered, but, i knew my target is right, after Sl. got triggered, I bought more lots in options and before closing my both positions are in profit now.

    simple logic is, who made loss by all ways, only he can make profit in stock market and I already suffered huge loss in past by using many ways like averaging, long-term etc. but, Today, I'm in profit. about Long-Term, Even you made 50-100% profit, what about inflation ? calculate, how much profit you made, with inflation. You can find, you made less profit or You didn't made good profit .when you will use that amount to buy something for your family or yourself. You will get true answer, you made profit or loss in Long-Term.
     
  5. anders

    anders Well-Known Member

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    I agree that having a well diversified portfolio - such as the S&P, like you mention - will mitigate risk in both the long- and the short-term. But I'm not convinced that on an individual stock basis the risk profile is reduced by holding onto your position long-term. You simply expose yourself to every market perturbation that comes along. It's a moot point, but that's just been my experience, although I definitely recognize it might be different for other investors.
     
  6. JR Ewing

    JR Ewing Super Moderator Staff Member

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    I tend to take at least some off the table on an investment if it runs up really high (or low if shorting) in a relatively short period of time - particularly if it's fundamentals are not keeping up.

    And I tend to buy in or add to a fundamentally solid position if it has sold off heavily either due to a broad market selloff, or an overreaction to something minor within the company or whatever.
     
  7. remnant

    remnant Well-Known Member

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    I was initially a risk taker before I learnt the hard way to be risk averse. When I was in college, I didn't even contemplate being an employee and almost abandoned my studies as a result. I became an innovator and I remember buying a briquette making machine and researched on alternatives forms of energy with a view to making a profit. I quickly realized most people were late and non adopters. This morphed me to be risk averse.
     
  8. rz3300

    rz3300 Well-Known Member

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    On the whole I am very conservative. I have always been, I was raised that way, and so I will always probably be that way, which is a good thing in my opinion, for me at least. That said, though, I have gotten a little riskier in the past couple of years, and it is out of nothing more than curiosity. Too much curiosity may come back to bite me though, so I have to be careful.
     
  9. kirtimeliwal

    kirtimeliwal Active Member

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    An investor should be a risk taker because a trader can become successful only if he has a strong risk tolerance capability. It is a key point in every field that if a person can manage his risk smartly then he can definitely get success in life.
     

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