Stock Market Investment – The Journey

By now you probably know that it takes a lot of learning and experience to be a successful investor. For many this would probably also mean learning the hard way i.e. losing money in the stock market. There are some fundamentals in your learning journey that you need to be aware of. I will share with you five tips on how you can make your stock market investment more successful.

The beginning of the journey. What is your end goal? What do you wish to achieve (e.g. how much do you want to make in 5 years)? These are some of the basic framework that you need to keep in mind. How much do you need to set aside for rainy day? How much can you set aside to invest in stock? We are not yet getting into buying stock, but first understanding your financial journey, hopefully on your way to make enough money to an early retirement. If you talk to a financial consultant they will be able to give you a basic idea of your financial situation. If you are looking at better managing your expenses, so that you have more money left to invest, there are many smart phone applications that can do just that. They help you identify and track your major expenses all the way down to the little ones that often slip our radar, and we all know they can add up to a significant amount. Being able to better manage your expense will provide you with more cash to invest.

The analysis. Stock investment is a fine combination of science (the investment fundamentals) and art (qualitative analysis). There are many resources available for you to pick up on learning the fundamentals of stock investment. However, the science of investing itself is not a simple subject to pick up let alone be an expert at it. The market erratic behavior is also something that you cannot pick up from the text book. This leads to the second piece of the jigsaw puzzle, the art piece. It is how you combine the skill of stock market science with the art of qualitative analysis, example to define when you should sell the stock.

Know yourself, your friends and enemies. What is your risk appetite? Are you the adventurous risk adverse, or you belong to a careful investor who prefers to keep your risk to a minimal. Nobody knows you better then yourself. Start with a strategy that you feel comfortable with. Be aware that there are many ‘news’ making its round in the market. Do not be blindly lead into the ‘news’ or some call it gossip. Do your fundamental analyses before you jump into a decision.

Stay the course. Stock investment is a journey and it pays to stay the course, especially when you know that you have done your due diligent. You may not see enough actions (missing out on making quick money) in the short term, but you will tend to reap better benefits holding up in the longer term.

Education. The market is uncertain and changing all the time. Invest both time and money to upgrade your skill. Education will certainly pays off, however, remember one must learn to take action after upgrading your skill, so that you can see improvement to your life.

Adhering to above strategy requires a lot of self discipline and a strong will. You are more certain to reap the benefits in your stock market investment journey if you can do that.

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