So what does make a successful investor? I'm sure you have wondered that at one point or another. I have a process that I use when it comes to investing in the stock market. I always consider the mindset of the market itself and the target customers. Looking at that, it's good to go "inside the customer’s mind" and see how that influences the trends of the stocks.
Here is the number one question that you need to ask yourself when dealing with the stock market: “What is the stock market exactly?” In other words, what does the market consists of and who controls the market? This is a useful question to ask yourself when considering a stock. Customers (the people who buy the products) control the market. If we think of the market as having human emotions and a human experience, we are then more able to understand the up and down trends of the marketplace as a whole.
The formula is simple to understand: Once we figure out why people would spend the money on that specific product and not on another of comparable quality, we can then figure out and understand why that specific company is making profitable gains.
I am a firm believer in trial and error. I do a lot of experimenting with different stocks in order to see which one is trending up and which one is trending down. With this in mind, it’s not my intention for you to invest all of your money into one stock (you could end up with a huge loss), but rather my intention is for you to be set up for success. We won’t know unless we try.
These are the five key components, in my opinion, of a successful investor:
Knowledge (Academic/Training/Resources) – In actuality, no formal business training is really required to become a knowledgeable investor. Just make sure to do your homework on the stock before investing.
Mindfulness/ Awareness (Understanding) - Approach every move you make with the understanding that this could potentially be used in your investment strategy. Investment ideas are everywhere!
Consistency/ Discipline – We have to understand that investing is a marathon. It may take time for your stock to be profitable and you have to be disciplined enough not to give in. It also pays to be a consistent investor who builds their portfolio. It’s more beneficial to become someone who invests twelve times a year versus someone who invests three.
Community - Please understand that no person is an island, we can learn from the mistakes of others and that we can use the support of others to our advantage. That is an industry secret.
Being Unbiased (detached of outcome) – Most importantly, you need to know that the funds you invest in the market should be money that you can easily part ways with in case the worst happens. Don’t become emotionally attached to your investment because there may be a chance you can lose it.
That’s all for now! Post your thoughts or questions in the comments section below. Until next time!
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