“Fast Money” trader Tim Seymour wants to help investors avoid common money traps that could leave them exposed to losses, particularly in a volatile market.
So, he’s out with a shortlist of four tips to deliver some peace of mind when things are going south.
Tip No. 1: Don’t have more money in the market than you can stomach.
Whether it is margin calls or anxiety about losing money you can’t afford to lose, bad decisions are often made during desperation.
Tip No. 2: Don’t hope that you get back to breakeven.
If you’re only holding a long position because you don’t want to lose money on the trade, you risk losing more.
Bottom line: Own a stock based on merit, not hope.
Tip No. 3: Don’t assume yesterday’s investment rational will work tomorrow.
Ask yourself, “Has something changed in the fundamental case or is it a case of market volatility?” If something changed, make adjustments.
Tip No. 4: Don’t cut your flowers and keep your weeds.
Often, the highest quality companies will outperform in a down market. Bad position? Circle back to No. 2.
To get more personalized investment strategies, join us for our next “Fast Money” Live event on Thursday, June 5 at the Nasdaq in Times Square.