Laws of investing

::: Transcribed from personal myspace blog account:::

I am starting a new blog - Laws of investing. These are some of the things I have recently learned while trading... They are laws, meaning you must follow these when trading for your own account.

1. Never trade on emotion...
2. NO investment continually goes up forever... You can trade on the natural fluctuations that are caused by emotion, but you will never find any asset to continually rise.
3. NEVER get greedy. You know you are greedy when you tell yourself, "Just a little higher and I'll sell out". Take your gains and be satisfied you made money and didn't lose.
4. Never use limit orders unless you are up and want to hedge against losing your profits.
5. Never trade after the market closes so your trade gets executed the next day.
6. Never invest in illiquid assets for short term profits...
7. Buy what you believe to be good - Not what friends, coworkers, analysts, or anyone else.
8. If your stock goes down, have a set percentage it drops and then BUY MORE!!! If you are having second thoughts, see law #7
9. If you wouldn't invest in the investment you currently have because the price is too high - That's when you sell... If you think it'll keep going up forever - See rule #1, 2, and 3
10. Residential Real Estate in Southern California sucks for an investment as of 2007. Do not invest in residential real estate, even as an investment property that you'll rent out.