Start Each Sail With The Return In Mind

There are five (5) main considerations to sail a boat:
  1. The date you set sail/depart (buy).
  2. The boat you choose to set sail with.
  3. The price you pay for the boat.
  4. The date you return (sell) the boat.
  5. The price you sell the boat for.
There have been many times I have left the dock and then, I'll do some research only to realize I wish I would have kept that boat at the dock!

When you buy a boat, buy it with the end in mind.

Take a look at this example:
  • Let's say a boat is selling for $40 per share and your research shows it might be a good time to buy.
  • Let's say you want to make 10% so you would like to return that boat to the dock at $44.
  • Let's say you don't want to lose more than 10% so you will need to return that boat to the dock if it hits $36.
  • You were hoping to sail less than a month, but, after you set sail, you start looking at your charts and you see it's been a while since this boat sold for $44. Furthermore, based on the sea conditions, you think it might take a while to get back to $44. Even further research shows the boat has a good chance of hitting $36 before it hits $44! Did you really want to sail it that long? Do the $44 and $36 exit prices now make the $40 purchase price less attractive?
In summary, try to condition your brain to think as if you are buying the boat at the price you want to sell it for. Using the above example, $44 and $36 are the key prices you want to be thinking of (write them down) BEFORE you set sail at $40.

Fair winds and following seas! Black lives significantly matter.

Trading Tide Levels (at the time of the post):
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This is for informational purposes only and the information provided does not encompass all possible or probable outcomes. Nothing posted here is an indication of future results or is a guarantee or promise of future investment returns. Investing in stocks or bonds carries risks including losing your entire investment. Nothing is recommended, advocated or endorsed including any third-party links, resources or advertisements of any kind. Any investment decisions are recommended to be in conjunction with a Certified Financial Planner with a comprehensive and personal financial plan and all other components that make up your own financial situation.


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