Never Set Your Own Price Targets
How does the stock market work? Investors do their homework, pick a stock, predict where it’s going and then sell once it’s run is over. However, investors have got into a bad habit of setting their own price targets. They believe that this will give them good discipline to sell no matter what when it reaches this target. It isn’t good discipline, it’s dumb investing. If you ever noticed an analysts grade with their price targets set, you know that rarely does a stock land anywhere close to that target price. The market is too unpredictable to accurately predict when a stock will drop. It’s important to be a reactive investor, wait until the signs of the market tells you that it’s time to sell.
