TheBanker

Hello, I'm "The Banker".

I've set up this hub profile to catalog my interest in stock market investing and to show and demonstrate a method of picking stocks I've found and am going to put to the test here while you watch.

I'm no expert on the market and the stocks I talk about on these hubs are not investment recommendations. Be sure that you do your own research.

That being said, during 2008, the market fell dramatically. I'd guess that millions of people lost a ton of money in the market. I personally know people who lost nearly half of their investment portfolio.

The question I ask is why?

Most if not all the people I know who lost money all had a stock broker. I think sometimes people forget that a stock broker has two roles. One, help you to choose stocks for your portfolio and two, to tell you when to sell.

Where were these brokers while the watched the stocks of their clients decline? And, why did they not tell them to lock in their gains and instead just sat idly by and let them evaporate?

That's a good question.

For most of us, we're brainwashed into believing the "buy and hold" investing strategy. This works if you are in a mutual fund as the manager buys and sells stocks as they lose favor on your behalf. But, if you buy individual stocks and hold them forever, then in my opinion, you are making a mistake.

Just in the seconds I am writing this, I can think of two people I know of that were heavily investing in the stocks of the companies they used to work for. In both cases, they held their stocks during the market downturn in 2008. And, in one case, the stock was a bank stock that ended up worthless, while the other just declined - significantly.

These people were victims of the buy and hold philosophy. Had they gotten rid of their stock after it had made gains or at least sold some of their holdings when the market showed signs of weakness, they would have saved a tremendous amount of capital.

Instead, their brokers stood by and watched on the sidelines while their clients lost a tremendous amount of money. We're not talking about a few people here. Many, many people lost serious money.

If mutual fund managers change the stocks in their portfolio, that tells you the one vital piece of information you need. That is this. You can't hold individual stocks for the long term. You must sell them at some point when they lose favor in the eyes of the big money that flows through them.

The hard part is learning how to do this and this is what my hubs will explore. I think that if you are going to make money in the stock market, you are going to have to be an ACTIVE participant. You can't just delegate it to your broker because that method has proven not to work for many people.

The first step is to develop a strategy and then to start to practice. Once you've developed the mechanics of all the steps you need to take to invest. Then, you can tackle the market for real.

I'm not an expert. I am not a guru. But I can apply what I've researched. What will be outlined on my hubs is a compliation of what I've learned so far from several different sources.

During a period of about 30 days, I am going to document how to walk through what I've learned so far and hope that through the journey layed out here, that you can learn to be a bettter investor and take action to do it for yourself.

If you have any questions, feel free to leave a comment and I'll try and get back with you.

"The Banker"