When markets are quiet, I tend to get a small smattering of emails when stocks don’t go straight up. They range from the mildly concerned to the outright stupid. There aren’t a lot of the latter, as the vast majority of the SmallCap Digest and Blog readership understand the risks inherent in investing in formative companies.
This fall has been pretty quiet for most smallcaps. Now, given the lack of momentum, tax loss selling appears to be increasing as folks position for the new year–calendar and tax-wise.
Investors view these times two ways; either everything is going to hell or there will be some skookum (really really nifty) opportunities at some point. We are in the latter camp. Our job is to report and illuminate–a starting point if you will to help investors embark on their own due diligence. Relying on any one source exclusively is usually a recipe for disappointment. Here are four smallcap investing rules that bear repeating:
1. NEVER INVEST MORE THAN YOU CAN AFFORD TO LOSE.
2. BE PREPARED TO INVEST WITH AT LEAST A ONE TO TWO-YEAR TIME HORIZON.
3. LEARN TO ACCEPT LOSSES.
4. LEARN TO TOLERATE BEAR MARKETS
If you have comments or venting makes you feel better, send ‘em on in. But before you hit the send button ask yourself if your use of bandwidth is warranted. Always happy to get emails and comments, but understand the depth and temperature of the water and whether it would simply be better to just get out of the pool.
We will continue to bring you those companies that we feel have amazing potential. I believe that when the markets get through this rough patch, the little stocks will come back with a vengeance. The question is, when do you buy them? That’s a question only you can answer. And we’ll continue to help with those decisions.
Trade Safely
