He who hesitates loses the most money

In investing, pretty much the same dynamic is true. We have those who invest with the idea of staying in for the long term. They often have "deep pockets" and can withstand sharp downturns as we've seen last year.

Then we have the short-term "hit and run" trader who takes a quick but small loss. By having more wins than losses this investor eventually comes out on top.

Then we have a third category. These are investors who start out wanting to make a short-term profit, but when their investment turns sour, they hold on, hoping that thing will get better. Most often, their investments get worse and they keep losing more and more money. They then are subject to margin calls and end up selling out at the bottom because they have run out of money.

The trick is to make all these decisions before you start investing. Am I a long-term investor? If so, can I withstand a gut-wrenching downturn? Do I have the money to hold out?

Am I a short-term trader. Can I get out fast and take my losses. Can I play the hit-and-run game? Do I have more winning trades than losing trades?

Or do I play the "hope and wish game"? By that I mean that when you start losing do you "hope and wish" that the market will turn around and bail you out. If you play this way, you will be the biggest loser.

No matter what your investment is -- stocks, mutual funds, bonds, commodities etc. -- decide first off how much of a loss you will accept. Use stop loss orders if necessary. Accept the fact that you will be wrong and be strong enough to take your loss. You can always get back in later.

If you lose nearly all your money by holding on, you won't have anything left to invest at the bottom. And finally: "when in doubt, don't."

Please add your own investment ideas to this list.