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Hi Greg,

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PraveenP   Wednesday, 07/23/14 03:59:25 AM
Re: glog post# 243
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Hi Greg,

I can stand the drawdowns because I know it's part of the process. I know that, as long as I have many stocks (or funds) then eventually stocks will bounce up.

I also remember that drops set up big gains. I like to think of it as a wind farm or pump. So, I welcome when the market goes up or down, because it is like wind and it generates energy (profits to be harvested).

Also, I had a big drawdown in 2008 (when everything melted) because I didn't have a big cash cushion. At that time, I think I had put in less than 30% cash. I recommend 30% cash in most cases, and probably 35-40% cash if you are retired, up to 50% to be conservative.

A big cash cushion will keep the drawdowns from becoming too severe.

Praveen


Praveen Puri
Author of "Stock Trading Riches"
The Stock Trading Riches System discussion board: http://investorshub.advfn.com/boards/board.aspx?board_id=19287
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