Making Your Own Decisions vs listening to the Analysis

In the investment work you can either learn to trade yourself, or listen to whatever the analysis tell you and follow their advice. Unfortunately too many people chose to follow the analysis instead of taking it into their own hands. There are 4 reasons why it can be a wiser to make your own decision then to listen to the “experts” 1. Many Analysis have a terrible track recordnnNow, I’m not saying there aren’t analysis who have made nexcellent picks, I’m sure some of them do pretty well. But as a whole mutual funds and analysis do not have the best returns on average. In fact according to a study at the University of California and Stanford, in 2000 the least favored stocks by 213 brokers went up 49%, while the highest rated stocks went down 31%. 2. Analysis Don’t Put Stop lossesnnThe first rule of making money in the stock market is to preserve the money you already have. And all around best way to do that is to put stop losses on your positions. This way you are not stuck with an account that has a large chuck taken out of it every time there is a bad surprise. 3. Can Interfere with Common sensennI have personally seen people hold onto a stock from $15 to $10 to $5 and lower just because the analysis agree it is a great stock to own. Remember common sense is very important; if a stock is going down why buy it as if it would suddenly stop? 4. Directional BiasnnMost analysis are what I like to call directional bias. Somewhere when everything was starting people got together and decided if a stock goes up it is good, if it goes down it is bad. No, they can both be good or bad depending on which side of the trade you are on. You can make money in a bears market just like you can make money in a bulls market. If anyone tries to tell you that it is good only losing 10% of your account while the SPY lost 30% during the same time period you probably should not listen to them anymore, that is kind of like the old saying if everyone is jumping off a cliff would you jump off it too? For some stock tips visit http://www.stocks-simplified.com/stock_tips.html For more on the stock market visit http://www.stocks-simplified.com