We have covered previous topics on the home page such as what it is you want out of life and what makes you happy? We have covered what this site will offer you when it comes to knowing how to play the stock market or to invest and some questions to ask yourself in regards to exploring your personality a bit and finding out little bit more about what it is that you want for various parts of your life. Congratulations, now that you have answered some of those questions in the investment process you can take a deep breathe and relax.
A Little Secret to Controlling your emotions
I’m going to share with you a little secret that the wealthy people I know and most wealthy individuals across the world share, a trait they possess and all have in common from my studies and observations so far in life. Are you ready? Here it is… They all to some extent, give their money away to foundations rather than focus on acts of selfishness to make investments work for them and they genuinely want to help people in some form or fashion. Weather it be donating to a charity or helping a single individual, whatever it may be, they all give some of their money back to society to leave their mark or leave a legacy. You might be asking what does this have to with investing or making money right? I’ll be honest…. it doesn’t. I’m simply making a point, that if your too focused right now on being GREEDY and making profits in the markets just for yourself, you aren’t going to make a dime and if you do happen to get LUCKY and make some good profits which occasionally will happen, even if you keep it all to yourself you aren’t going to be happy.
Numerous studies show that humans as a race are more happy when they give rather than receive. The reason I say this is because if you are going to invest, you need a plan and a purpose for why you are doing it, otherwise you are going to last maybe about a year or two if you can endure the failures and loosing all your money because of fear and greed. Trust me I know from my experiences so far in losing 7,000.00 over the course of the past 3 years. (Remember, if you went to the “about us” page and read my story…. I told you that I will share with you some of my pitfalls or failures. Well this was one of my failures.)
I honestly believe that most of my money was lost because I was so focused on profits and having a mind set of NOW, NOW, NOW instead of being patient and allowing my emotions to be calm through the UPS and DOWNS of price fluctuations on a stock I was day trading. Just my observation of my own mind set for example – in the midst of China’s market collapse back in August of 2015 that caused our stock market to plummet a whopping 1,000 points in one day. I had a exit strategy but I broke my own rules for wait time on settlement dates through my broker because I wanted money NOW I didn’t want to wait and guess what….that simple mistake cost me 2,000 in 1 day.
Lesson from my mistake – Be patient and don’t panic if markets decide to take a nose dive on you because eventually they will recover. Luckily, I was able to get out with my exit strategy I had in place and didn’t lose all my money. I lost 30% of the total investment but guess what? I was able to jump back in later on and continue playing the game of the stock market and made some of my losses back.
Tips for controlling your emotions while investing or speculating
- Have a percentage in mind of how much you are willing to lose when it comes to your investment. Is it 10%, 20%…. what is your number?
- If your stock decides to go down in price, (A suggestion) don’t sell right away based off of fear or what WALL STREET and media might be saying unless of course it hits your number for how much you are willing to lose. We will cover Fear in a later segment of this site but for now just try not to focus too much on what others say about your investment. If it makes sense to you then keep your investment.
- Understand the law of gravity is around us at all times. What goes up must come down, therefore the price of your investment will fluctuate through out time. Don’t panic or sell the asset based solely off of this.
- Ask yourself if the price you are paying for a stock is the price you think it is worth before BUYING, when considering the value of your stock compared to the industry sector that it is in. (This will give you a piece of mind if you are buying in at lower prices because you eventually the price will have to go up which would mean profits.)
Stay in your Lane!
Now that you are equipped with some basic key points to remember as part of the investment process, to help control your emotions before ever throwing money on the table, you can now take a look at what stock you might want to invest in before you make an investment.
This topic alone can have people wondering and doubting themselves for days, weeks or even months. So to make it FUN with all the research you will have to do on picking a stock, so that it doesn’t seem tedious to you, Pick a industry sector you are interested in. Pick a sector where maybe you wanted to start a business in or have a hobby in but didn’t have start up money to get the business going. This will keep the tedious tasks of reading financial statements and news on the company from getting boring.
If researching stocks is boring and your money is tied up in a single stock, you have less desire to watch the investment and if you aren’t watching the basket, your odds of losing all the eggs in that basket have just increased. YOU DO NOT WANT that to happen. Below is a list of different industry sectors you can chose from.
Industry sectors for investing :
There are a couple other sectors to consider that aren’t on this list such as retail and commodities. So now that you have a list of industry sectors in the markets, pick one or two and FOCUS in on companies that interest you in those sectors.
Once you have found a few companies we can cover the next part that consists of your plan and what angle of investing you would want to take. For example – Would you want to trade stock SHORT TERM for profits or take a more LONG TERM approach to the investment process?
If you have more questions on anything covered on this page you can leave comments below. The more ideas and comments you post the more quality material comes out of it with new information that can be applied to future posts for this site. So please feel free to comment. Thank you!