“Money management” may seem like a rather self-evident moniker for those processes which we perform daily related to the income and disbursement of money, but the management of money in investment is a special ordeal of its own. Investment is not an exercise in making one choice and seeing that decision to fortune or bust. Money management is a core matter that will decide how well you ride the waves of gains and losses, and whether you will be able to re-enter the market following a catastrophic market change.
Money management is a key to ensuring survival in the unsure world of investing. Without having a necessary grubstake through which to re-enter the market, you may not only not have the opportunity to re-enter financially, but you may also be permanently soured on the prospect. Money management is about having money to start over.
Money management is also the control of purchases and sales with a clear mind. It may be human nature to ride what appear to be sharp rises and falls, as though they were manias or depressions that would level. The management of money is the knowledgeable and formulaic treatment to investment that avoids the pitfalls of gut feelings and tips probabilities of success in your favor both today and through tomorrow.
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