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Warren Buffett is the best investor of our time, perhaps of all time.  Does this fact mean that the way to riches is to track and emulate his investment moves?  Well, if you are a billionaire looking to maintain your financial empire, then this is probably a good strategy.  But if you are still working on your own financial mega entity, then you are best served going off on your own.  Studying his strategies and investment philosophy is certainly beneficial to any investor, and will strengthen your mindset toward the markets.  But do not think that by matching the moves of a mega investor that you will become one too.  You must hone your own strategy to first achieve that level, and then when you are in the same vehicle can you drive on the same road to the financial stratosphere.

Buying and holding, in this market especially, is a risk that should be avoided.  www.aestocks.com has posted consistent and steady returns for the past four years.  Many investors unfortunately think of an active system as risky, and therefore avoid it for something they see as more conservative.  A solid active system like AEStocks.com actually limits exposure to the overall market fluxuations, which proves to be a huge advantage.  If you are running across a minefield; would you rather run the length of a football field, or dash 10 yards and then move to the sidelines?  Short focused efforts, with the properly safeties built in (via limit orders, trailing stops, etc), can greatly reduce your risk when dealing with stocks.  Look closely at your trading strategy to see if your natural sense of risk aversion is actually sending you through a much longer minefield.

Seven.  Having this many stocks, spread out among different sectors, is the perfect number to have on your long term side.  This allows you to benefit from growth in each of the major sectors, and still be able to track them weekly.  Many investors think that they have to have several stocks to be diversified, but this redundancy among several sectors only serves to hurt their positions because no one can devote the time needed to maintain thirty or more hours a week.  By being able to track your stocks, since there are only seven to watch, you can focus on the best in each sector.  Another point is that after a certain number of stocks, you reach a point of depreciating returns due to the fact that they all will not be top performers in their sector.  This will take away from the seven that you have as the solid gainers.  Being properly diversified across sectors is far better then being diversified within the same sector.

Most financial professionals agree that precious metals should make up around 10% of your portfolio.  The question then comes up as to which form should it take.  You could invest in a pool account, or buy physical metals but keep it with the entity you bought it from, or buy into an ETF, or buy and take physical position of it, or even buy shares of an actual gold mine.  The form you select depends on your motivation for diversifying into precious metals.  For us, we elect to buy physical gold and take position of it.  Our view is that in diversifying into gold, we are protecting ourselves against a serious market downturn.  In such a case, the other types of accounts may not be able to meet the demand of those wishing to cash out and take position of physical gold.  Plus, nothing helps ease the pain of a market bump then knowing that you have a healthy stash of a solid physical asset.

Little to nothing.  This in itself is the most beautiful aspect to an actively traded stock system.  When an investor or stock trader looks into active trading, the biggest hurdle is the long term mindset.  Investing and stock trading long term has totally different variables then short term active systems have.  This is why what the market or the stock’s sector is doing means nothing for the one to two days you hold the stock.  www.aestocks.com has 17 variables that are specifically designed for short term stock picks.  Don’t forget that when you are looking for short term stocks, that it is imperative for you to be in your short term mindset.  When I first began venturing from long term into short term stocks, it took me a year to figure out that there were different variables for each.  I missed out on several explosive gains during this period because the sector the stock was in happened to be getting nailed.  One of the main reasons we actively trade is to avoid market exposure.