Question:
Like most baby boomers, my retirement accounts have taken a hit. So, I have to put off retirement until I build them up again. I’m thinking that I need to move from “investing” to “trading” in order to gain back what I’ve lost. I’ve been told trading currencies is one of the quickest ways to do this. I’m a “good” investor but will be new to trading. I want to rebuild my retirement portfolios back in the next 5 years. Any advice? Answer:
Wow! Sorry to say, but you are not alone. I am both a trader and an investor, so I understand what you want to do. However, even though I understand, I must caution you that your goal is a dangerous one. I say “dangerous” because it took me some three-plus years to learn trading when I moved from strictly investing. It can be more quickly, but you need to put yourself on a seriously steady diet of learning your markets, learning how to develop a strategic approach, and, most importantly, learning whether you have the disposition to trade. You see, trading is less about the markets you trade and more about you and your mental / emotional makeup. Discipline is paramount in the trading game, and the one thing that will take you out quicker than a tight stop is your ego and the inherent attachment ego brings to life. I recommend two books for you. One is Trading in the Zone by Mark Douglas, and the other is Trading with VantagePoint, One User’s Perspective by Brandon Jones. You can get the first book anywhere, but the second is right here on TraderPlanet.
If your investment time horizon is five years, I would seriously recommend reviewing your portfolio to weed out the investments that are “dead.” The others, those that are fundamentally strong but are beaten down from the turmoil of the last 18 months, I would keep and wait for their comeback. One example in my investment portfolio is Verizon. At its lowest point in the last year, the stock lost some 45% of its value. Why? Because people panicked and sold. Today, I am down 21%. I expect a full recovery plus some. Finally, trading currencies may well be a quick path to riches, but I doubt it. I personally know people who have enjoyed phenomenal trading success and then lost it all, no matter the market. Remember, whichever market you choose to trade, the fundamental rules of the game are exactly the same, and the number one rule is “Preserving and protecting your capital is more important than trading.” Think about it.
Trade in the day; invest in your life …
