Generally, when I include reader feedback in my column, I use only first names and I try to be discreet. I assume that people like to see that their letter made it into the newspaper, but they do not necessarily want the whole world to know.

 

And for this reason I am slightly confused about how to deal with the letter I received from Ian. He sent me his basic principle of investing: "When you make an investment decision, follow through on it!" This is good advice, assuming of course you thought carefully about your original decision.

Ian illustrates his principle with two anecdotes about his wife, who is apparently prone to announcing her decision to buy or sell some particular stock and then not doing so. From what I could gather, this has from time to time resulted in great disappointment to Ian when he discovers that the stock she planned to buy had skyrocketed and that she had not actually got around to buying it.

I suggested to Ian that perhaps I should not provide details when I mention his story, for fear of upsetting his wife. To my surprise, Ian replied by giving me her full name and requesting I "name and shame" her. He was perhaps planning to show my column to her and say, "See, Alan Alanson agrees with me." And I do, just not about using a letter to a newspaper to settle a marital dispute.

Andy, from Singapore, suggests that anyone entering the market needs to make a conscious decision to either be an investor or a trader, the difference being whether you plan to invest long-term or trade short-term. Once you have made the decision, you know what kind of strategy to follow and having any strategy is better than having none.

However, Adam clearly thinks that the stock market ought to be regarded only as a trading proposition. The old principle that markets can be relied on to eventually go up is no longer valid, says Adam. He suggests that investors should no longer think in terms of buy and hold but instead should focus on actual cash profits.

A great illustration of this point is the history of the Japanese stock market. In the early 1990s, the Nikkei 225 Index peaked at 38,000 and, for a while after that, hovered around 30,000. By 1995 it had dropped to 20,000 and it ended the decade about there, too. Today it is slightly more than 10,000. That's 20 years in which the market has not recovered. Anyone who bought in 1991 and thought, "I'll just hold on, things will pick up", could tell you that markets don't always go up and down. Sometimes they just go down.

Shu-wing's slightly more cynical theory is that we should watch what products local banks are pushing and buy something else. The reasoning here is that if banks are having trouble selling equity funds, for example, they will start offering free televisions, cash rebates or discounts in order to encourage customers to buy the product. The point Shu-wing makes is that if banks are having trouble selling a particular product then there is probably a good reason. In the case of equity funds, this would suggest that equities are overvalued.

I haven't been paying close enough attention to which products have been attracting the most interest to be able to comment on this idea, but there is certainly something to be said for being a contrarian. Which brings us to our last investment tip.

Harry writes that if you don't know who the sucker is at the poker table, then it's you. And the same can be said for personal investing. If you can't tell who the loser is on the trade, well then, you know who you are. Anyone who bought an accumulator last year will no doubt vouch for this.

Now, of course, markets have been steadily rising for the past few weeks, so no one really needs investment tips. Nothing like a rising market to make us all feel good about our stock-picking abilities and to not bother about strategy. But, dear reader, behind every silver lining there's a dark cloud, so don't forget to carry an umbrella.