How great it is that we can change our minds and take decisive action immediately?
As traders in the financial markets, if our spidey senses detect that something is amiss or conditions have changed, we can often liquidate our positions and head safely into cash with just a few keystrokes on our computer. Depending on the size of our positions, we can be completely in cash within minutes, maybe even seconds!
You can’t do that with Real Estate.
You certainly can’t do that with Private Equity investments.
You definitely can’t do that with a small business.
All of those investments are fine for their own reasons. But they don’t offer us the opportunity to immediately exit if we change our minds.
Of course, just because we can change our minds on a dime doesn’t mean we always should. If we’re wishy-washy and trading without a plan, it becomes incredibly easy to overtrade and drive our commission bills and nerves through the roof. While this might make us popular at our broker’s office, our accountants will unlikely be pleased. [Read more…]