3 Powerful Tips For How to Learn Stock Investing. Avoid Confusion & Frustration Along The Way!
If Kanye Can Do It, So Can You.
I hear it all the time. “I want to start investing, but I really have no idea where, or how to get started…”
If you’re reading this you probably can relate. It is definitely a common dilemma for new investors. I dealt with this roadblock when I was first starting out.
If you take nothing more from this post just remember this — it's fine to feel this way, but it's not fine to let this feeling keep you from starting!
So, without further a due here are 4 tips that will help you overcome this roadblock and get you on your way to more financial freedom!
1. Get Educated. There Are No Shortcuts.
What is it about investing in the stock market that makes people think: “Hey, with a few random youtube videos under my belt I will be as rich as Warren Buffet in no time!”
Would this be a good approach to apply as a surgeon?
This is of course satire, but my point is that there is risk involved, and to not take that risk seriously is a recipe for disaster!
Making a small investment to learn the right way pales in comparison to the potential cost of incompetence.
Trust me on this one. I learned the hard way.
When I first started investing/trading I took the trial & error approach. I lost ALOT of money in the beginning. 7 years later (after getting educated) I am a profitable trader & investor.
See… this is where most people give up, and why there is a 90% failure rate among traders/investors.
So, Here’s the key takeaway for this one — Do your research, find a training program that makes the most sense for you, and your financial goals, and follow it strictly for at least 6 months. You’ll be ahead of the curve right off the bat.
2. Practice, Practice, Practice.
Ok, so you’ve made the investment to get some legit training… now what?
Before you just start throwing your hard-earned money into the markets, it's time to practice & test what you've learned.
This step is not even on most new investors' radars.
What most novices don’t grasp right away, is that the key to having an edge in the market is having strong mental fortitude.
You must understand that trading & investing are 80% psychological 20% execution.
Let me give you a scenario to drive this point home:
You invest money into a program, and you’re as excited as a schoolgirl on her first day of class to use the strategies you’ve learned. So you give it a go and start making moves in the live market without first testing your strategy…
Your inexperience leads you to jump in a bit too soon (or too late), and the stock begins to tank. You’re in the red right off the bat.
You sort of try to brush it off, but whether you know it or not your mindset has been compromised. You keep thinking about what went wrong, what you should've done instead, and if it was even worth it to invest in that program.
If you are new to the markets you won’t know how to reign in these feelings, and they will inevitably spill over into the next positions you decide to enter.
This can cause a snowball effect of negative thoughts, and losses in your account.
Here’s the key takeaway here— Test your strategy for at least a few months. You can demo trade through your broker. Demo trading doesn't cost a penny. Review your course while you apply it on the demo account, learn from the mistakes you make, take notes, and don’t make decisions based on emotion.
3. Know Your Risk Threshold
Most traders & investors go into the markets without a clue as to what they would be comfortable risking.
At what point do you cut your losses? At what point do you take profit off the table?
What's the point of investing if ALL the money you make from the market is just theoretical, and never captured? At that point, it's just a video game.
A good investing & trading program will teach you how to manage your risk, but it will be on you to execute the criteria exactly as taught.
This can be difficult because when you need to cut a loss a false sense of hope often creeps in.
It will convince you to think: “Hey, maybe if I hold a bit longer things will turn around.” From experience, I can tell you most times they don’t, and you’ll be stuck with an even bigger loss.
Here’s the final takeaway — Never invest money that you are emotionally attached to. Once you put it into your brokerage account you should kiss it goodbye. If you are depending on that money to buy a house, or pay bills or anything at all you should not invest it.
To Summarize
Investing in the stock market is a great way to build wealth, but there is a right and a wrong way to go about it. Don’t listen to “gurus” who say otherwise.
Not knowing where to start can make things harder. Not to mention all of the free info online on the subject can be overwhelming.
Everyone has a different approach, and trying to learn from the free info is like trying to assemble a puzzle with pieces from multiple puzzles. It just won't work and will leave you frustrated & confused.
Keep these tips in mind as you’re getting started & they will help you minimize the confusion that comes with learning how to invest.
Until Next Time,
Gaston
