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To: bruwin who wrote (117838)	2/4/2014 5:58:26 PM
From: Steve Felix	Read Replies (1) \| Respond to of 118717

Well, we've gone from: "from an early age, say, 25 years of age" and "assume an annual stock market investment gain of 20% per annum" to "13.4% annual compounded increase" and "a 10% trailing stop loss should lock in about 16% of their gain to date." So we went from 1.66% a month to .94% a month. Then we get here, over a strong period for the market: "A young investor would have done pretty well if he had put money into Buffett's ongoing top 10 stocks in terms of his holding in those stocks. We did that 17 months ago and have obtained a gross return of over 18% to date." 1.04% is way below the first 1.66% that sounded so easy to do year after year. Reminds me of a commercial, 20% per annum, so easy a caveman could do it.

To: bruwin who wrote (117838)	2/4/2014 11:19:26 PM
From: Biomaven	Read Replies (2) \| Respond to of 118717

There is no free lunch in investing. Using a stop-loss will, on average, reduce the size of individual losses but also increase the frequency of such losses. If you need to limit risk, in general you are better off changing asset allocations by increasing holdings of less-risk assets than by trying to manage risky investments with techniques such as stop-losses. My general advice to novice investors is to put their money in a broad-based ETF. For those that insist on trying themselves, my advice is to avoid frequent trading, ignore brokerage reports, and try to focus on some long-term trend - in my experience the market is pretty blind to stuff that happens over anything longer than a couple of years. Right now, cheap natural gas is my key trend and the basis of most of my non-biotech investment strategy. Peter