The situation is familiar. You are sitting there with your hand over you eyes thinking, “How do I keep losing money investing? Aren’t people supposed to be making money and growing their accounts?” The answer is not that simple, ask yourself, “Aren’t people supposed to win at playing poker?” The answer should be the same, yes but no.
There is no money being created in investing, sure the company wants to grow over time, but by investing you are only taking money from other investors, minus the broker fee. This actually make investing a negative sum activity, which means there will always be less money coming out than going in. Yes, it is a huge game of musical chairs that nearly everyone with a 401k is playing.
Now that you know what investing really is, you can ask yourself a question “How seriously have I really taken this?” Think about it, you are going up against the best people in the world, who want nothing more than to take your hard earned money from you. Would you step into a boxing ring with the best heavyweight boxer in the world with minimal training yourself? Absolutely not! So why do you insist on doing it with your money in the investing world? The answer is, you need to take this game seriously and give it your best effort, that way you can at least beat out all the other “Shmo’s” who think like you used to and aren’t smart enough to do something about it.
Below is a list of things you should be doing to better your investing:
- Be in a constant state of studying – Investing is both an art and science, and it is constantly evolving, you should be constantly learning new methods, techniques and ways of thinking, so you can adapt to the environment.
- Keep a detailed journal of everything you have done – You should be keeping detailed notes of everything you have done and your reasons for doing so, these should include chart pictures as well. You can join a supportive online community and get input from other traders, or you can choose to keep your journals private, but the bottom line is that you must keep one!
- Keep your emotions out of it – If you have ever though “Oh, this baby is moving and I am missing the action” before you entered a trade, then you know what I am talking about. What always seems to happen right after that? I’ll save the painful details, but it’s not pretty. You must learn to separate this part of yourself from your trading. When you feel these feelings come on you need to take a step back and not trade until they dissipate. These feelings are caused by frantic greed, and as an investor one needs to be cool, calm, and collected. In other words, the exact opposite.
Everyone has had to go through their own learning curve, and learning to invest profitably is a journey that takes some time and commitment, it does not happen overnight. How long do doctors study to become professionals? If you want to grow an account and be rich it takes some serious, serious dedication. Ask yourself how dedicated you are to become successful, if you are not willing to put in the time, then maybe you should find some other way to grow your retirement.