Just like when you hear that you haven’t taken a loss in a stock until you sell out of your position, the same goes for your profits. You didn’t make anything until you have sold the stocks.

After the DOW made some major drops and looked like it it had bottomed, I started to build up a position in some stocks that I’ve been watching for some time and know that they were solid companies with good fundamentals. The stocks gained in value by about 25% and from my experience, I sold out of about 50% to 75% of those positions. What I didn’t expect was that the stocks weren’t done gaining value. The DOW pretty much leveled off, but the companies that I invested in had some more momentum in them. I missed out on an extra 10% to 12% of gains that I could have had if I just hung in there and waited.

My point is that yes I could have made more money than I already did, but I could have lost a good portion of those gains too if the stocks fell. I’m just as happy with the 25%-30% gains since they are now in my account as cash. There’s a saying that I’ve heard Cramer say many times and I agree with him. Bulls make money, bears make money and hogs get slaughtered. As long as you continue to make money in the stock market, you’ll be able to continue trading and investing in stocks.

Being able to sell when you’re up is easy as long as you don’t get greedy. I’ve spoke about it before and I will talk about it again. Be happy with the gains you made instead of getting frustrated over the money you could have. The same thing goes when you’re looking at a stock to invest in and before you get the chance to build a position in the company, it makes a big jump in value. You missed the opportunity and there will always be another one as long as you are looking for them. I watched too many people try to “chase” a stock up only to get in it right before other trader start taking their profits.

Don’t get yourself bent out of shape if you miss a ride up on a stock and don’t get “hog-like” by staying in the stock too long. Following these rules will help make you a better investor or trader.

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When I left one job to go work for another, I had to wait a certain time until I could enroll into their 401K plan. The company only had 21 employees and one third of them had started within the past year. Since the company was small, it had been using a local financial broker in the city and a representative come down to the office to talk with all of us.

He spoke to each of us to see how he would best invest for our individual needs. I told him that I since I still had over twenty years before I would retire and was thinking of investing more on the aggressive side. On the forms that were in front of us, there were well over a hundred and fifty different ETFs, mutual funds and bonds, but nothing towards individual stocks. He told me his suggestions and at the time I wasn’t has informed as I am now, so I took his advice and agreed.

I received a quarterly report from them about nine months later and noticed that there wasn’t much growth in the portfolio. I ask some of the other employees how they were doing with their investments. Out of the five of us that discussed our investments, none of us were the same age, marriage status, or had the same amount of dependents. The odd thing was that roughly 60% of each of the portfolios were invested in the same funds. We realized that these funds that we were invested in, were high commission earners for the “salesman”. These funds were also the laggers in the portfolios.

I tried to reach the representative who handled my account to get answers, but it was next to impossible to get to speak to him. I spoke to the owner of the company I worked for to see if he could make contact to get some answers, but it never happened.

I left the company about three months later and decided to move my money out shortly after leaving. They informed me that I shouldn’t be looking to take the money out, “I would do better if I’d just leave it in there”. I received my annual statement from the firm and noticed that my account had increased by less 5% overall.

I decided to get my money out and put it in an IRA with one of the online discount broker. They had me jumping through hoops with all the forms and procedures that it took almost two months to finally get transferred. They told me that there would be early withdrawal frees and penalties. At that point I didn’t care, I just wanted it out of their hands. If it wasn’t for the online discount broker going straight after the firm directly on my behalf, who knows how long it would have taken.

After the firm took out its management fees and costs as well as the penalties for removing my money, I had only a 2% gain for the time that I was invested in the plan. The firm was able to take over three percent of the profits for themselves.

When someone else is handling your investments, you need to know what you’re being charged for otherwise you might lose a good portion of you retirement fund to costs. You might think of it as only 1% of your portfolio each year, but consider how much that first year of capitol would be twenty years later, it adds up once you factor in compounded interest on the principal from those earlier years of investing.

Be aware of what you’re paying for, it could mean the difference in when you can retire.

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