If you are seeking investment help, look at the video here on my services. If you are seeking a different approach to managing your assets you have landed at the right spot. I am a fee only advisor registered in the State of Maryland, charge less than half the going rate for investment management, and seek to teach individuals how to manage their own assets using low cost indexed exchange traded funds. Please call or email me if interested in further details. My website is at http://www.rwinvestmentstrategies.com. If you are new to investing, take a look at the "DIY Investor Newbie" posts here by typing "newbie" in the search box above to the left. These take you through the basics of what you need to know in getting started on doing your own investing.
Tuesday, June 7, 2011
This is a 10-question quiz produced by John Mowen, a social psychologist and emeritus regents professor in the Spears School of Business at Oklahoma State University.
IMHO, some of the questions are excellent - some not so much so. For example, an emotional, superstitious, thrill seeker should stay away from stocks and hire a professional to manage their money.
On the other hand, puts and calls can be used to "gamble" in the market; but they also can be used to hedge a portfolio.
Also, I would rephrase the question on whether a stock has been held "...for less than a day." A few years ago, I read the morning Washington Post and noticed a company I had never heard of was testifying in front of Congress on bomb detection devices which it produced for airports. This was a subject that the country was hyped up about and I figured this would, in effect, be free publicity for the company. I looked it up, thought the company had good financials, and was reasonably priced. I bought 1,000 shares and went off to my morning dentist appointment. On my return I saw the stock had moved from around $4, where I picked it up, to around $7. I sold. This is rare for me but, hey, if the market gives a gift I will take it. Even investors don't look a gift horse in the mouth (what a great expression!).
All-in-all the quiz is valuable in that it will get investors thinking about an important question. I answered the quiz as if I was a gambler to see the resulting advice/commentary. It said that gambling with a small portion of assets wouldn't be overly harmful. I would be careful here - gambling can be like smoking. Some people can smoke a couple of cigarettes a month - others can't. Smoke a couple and the next thing you know you're at a pack a day!