Investing in your education, observing your emotions and sticking to your game plan can help you run laps around most investors. Use these 3 tips to invest intelligently.
Invest in Your Education
Buy eBooks and courses which teach you emotional discipline. Even if you’re a skilled investor you’ll need to learn how not to act on your emotions when the market is racing to a huge top or is crashing toward a cavernous bottom. You may spot when to hop in and when to be out of the market if you’ve learned from professionals how to invest intelligently. Keeping abreast of today’s stock market news is a great way to maximize your returns. Pay for a service to note the latest and greatest marketing strategies and to keep current during an ever changing market.
Learn How to Observe Your Emotions without Acting on Them
Courses can help to teach you how to not act on your emotion during periods of mass greed, fear or hopefulness but observing your emotions on an hourly basis gives you insight into how you allow your feelings to dictate your actions. Most people have little control over their impulses.
Knowing this, if you can watch your feelings without acting on them you’ll have a leg up on your investing competition. Carry a note pad with you to mark down how you’re feeling in response to your trading or investing day and also note how you’re feeling in general. Emotions like fear, greed and hopefulness can aid you if you are going about your normal day but on the investing side of things these strong emotions can wreck your returns.
Few know how their feelings influence their actions. As an investor you need to be armed with a steely resolve and commitment to acting with discipline if you want to outperform the market. Note your feelings in response or reaction to big marketing movements but decide not to act on these emotions. Stick to your game plan.
Know When to Act Based on Your Plan
Take profits and sell at set percentages. For example, take profits at 20% and cut losses at 8% to stay in the investing game. Capital is your greatest asset and if you don’t have money to trade you’re automatically out of the investing game. Be disciplined by sticking to your game plan. The market doesn’t care if you need to make a car payment with your anticipated proceeds so it’ll continue to drop as you bleed thousands or hundreds of thousands of dollars over weeks and months during a down turn. Selling at 8% would have saved your skin.
If you became greedy the market doesn’t care that you want to buy a shore home with profits you should have taken at 20%. After you held on for too long, and watched your profits evaporate after bad news torpedoed a stock, you may be kicking yourself and cursing the market but following a game plan would have prevented this mess.