Seriously, the best advice you will hear (and not just from me!) is this:
It is imperative to have a plan and stick to it.
If you’re a DIY investor, you must follow these steps to minimize risk:
1) Have a plan and stick to it.
– Long term dividend growth? Buy your stock at a price you deem fair, and move on to your next purchase.
– Short term investor? Set stop losses. Minimize downside.
2) If you’re in it for the long term, DON’T LOOK!
– Seriously, there is no need to check your stocks every day, week, or even month. You have a plan, you pulled the trigger to buy a stock at a price you thought was fair or undervalued – now you must wait. Retail investors frequently lose money when they check their stocks only to see the page blinking red and your holding -30%. Panic ensues. We are late in the cycle and you must expect slower or negative growth. This can drag your holdings under water. It also provides an opportunity for you to add more to your holdings at better valuations.
3) Never stop investing.
– You should have an investment plan: X amount of your income will be saved for investment each year. Everyone has a different investment philosophy; some prefer to purchase stocks in smaller amounts more frequently (each month or few months) while others save for a year and then invest. It doesn’t matter how you do it, what matters is that you keep adding no matter what the economy is doing. Each market decline provides opportunities to buy more stock (December 2018 a great example of this). As the old saying goes, be greedy when others are fearful… but, also be smart. There is no such thing as a quick buck without significant risk.