Liquid Millionaire - isaco

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Liquid Millionaire
It is important for you to be aware that your tax-free account is going
to eventually grow into six, seven and even eight-fi gures over the up and
coming years. And when your account suddenly drops in value, you will
need to know whether the fall is a healthy one or whether the drop is
leading to something more serious. When your portfolio loses value,
which it will, even when the market is in an uptrend, you are going to
need to be certain whether the drop is healthy or unhealthy. You have
to know whether to sit out the correction or whether you should be
“parked” in cash on the sidelines.
Mastery Is the Key
Without the confi dence that comes with knowing your stuff , you are
more likely to make the wrong decision and end up possibly losing a lot
of money. When the market does drop and you know with certainty
that something is wrong, that is when you can get out of the market and
get out fast.
Of course knowing with absolute conviction whether the market is in
trouble or not can only be achieved when you have attained market trend
mastery. As your capital builds up, the need for understanding market
direction ( health) becomes even more important. If you try to follow
your gut instincts, you are going to experience plenty of pain, so please
be careful.
Edwin Lefevre, author of the classic Reminiscences of a Stock Operator, once
said, “In a bear market all stocks go down and in a bull market they go up.”
Th e people who failed to get out of previous bear markets such as 2000-
2002 and the one that began Oct 2007 will have probably lost anywhere
between 50% to 80% of their portfolio’s value.
And imagine if you took an 80% loss just two years before you were
pl a n n i ng to re t i re ?
Th e scary thing is that a portfolio valued at one million pounds would
reduce down to just £200,000. I am sure you will agree that that sort