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Investing in stocks, in my opinion, is
not a mystery. There are no Holy Grail investing systems out there where profits
will automatically fall into pockets. There is no one stock investing method
that is the BEST way to invest in stocks. Just like there is no one best way to
run a business, get fit, be happy, be successful, acquire wealth. There are
simply methods that work and methods that do not.
Many people who attempt to invest in
stocks and fail at it seem to commit the same cardinal sins. I have listed the
ten most common reasons many investors in stocks fail to make a profit when
there really is no reason not to:
1) You do not plan. When you get into a
stock you must have reasons why. Where will you get out? What happens if the
stock flies up 200% in the next 3 months? Will you add to your position. "Trade
you plan and plan your trade."
2) Over diversify. You own too many
stocks. Like a child in a sweet shop you can't resist buying this and that
stock. Focus is the key to large profits.
3) You do not have a system/method. You
trade from opinion, tips, outside advice. I don't know anyone who has made money
consistently from third party advice.
4) Money management is more important than
where to enter. Money management is a vital subject when investing in
stocks. How much to buy? How much to risk. This is where you success lies.
5) You actually trade/invest too often.
You want to trade all the time. You want action. You are not patient waiting for
those ALMOST certain trading/investing opportunities where big profits will be
GIVEN to you. You are drawn into short-term gambling methods or even
highly stressful day trading techniques. Not realizing the big money is in the
big moves. Be patient and the money flows in.
6) You will not pay for specialized advice.
For a fraction of the money you can make investing in stocks you can accumulate
fantastic information and tools that will help you in your lifetime career of
making money from stocks. But being too cheap you prefer to go it on your own.
Losing your precious $10,000 account tin the process.
7) You fail to take your time and build your
stock empire slowly but surely. Get rich quick schemes sell so well simply
because 90% of the population are stuck in this "get rich quick" attitude. It
takes time, effort and determination to build the knowledge and experience
necessary to make big money in the stock market. It's the same as any other
business.
8) Instead of becoming the very best at one
style of trading/investing you jump from one hot trading/investing method to the
other. To make more money than you could ever dream about in the stock
market vow to become the VERY best at one style of trading. Sure the market goes
through cycles. The big money is made from a specialized investing method. Not a
"jack of all" investing approach. Take a look at millionaires from all
industries. They specialize. You don't see Bill Gates learning about the stock
market. you don't see Warren Buffet going into software design. they are the
leaders of their own specialized niche markets.
9) You will not cut those losses. As
strange as it seems many investor/traders of stocks will NOT cut those losses
early. This is a lack of planning, fear of losses and arrogance. cut your losses
early and watch your portfolio grow.
10) You really didn't want to invest in
stocks. I see many people who are desperate in their current situation. They
dislike their day job and read there is money to be made in the stock market.
Having never read a stock book, or shown the slightest interest in the past,
they buy a trading course and expect to make big money from it. There is no
interest in investing in stocks. They have no passion about learning about the
stock market. If you do not enjoy investing in stocks and learning about the
stock market then make your money from something you really enjoy.
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