Many novice investors struggle with this idea that you do NOT have to buy and sell stocks every day.
I used to be one of them. This mistake cost me thousands at the beginning.
Yes, it’s cool to be in and out of the trades. I get it. It makes you feel like you’re on cloud nine.
But do you know? For each trade that you've done, you also need to pay a small fee like $10 per trade?
So, take me for example. In 2009, I made a total of 300 trades. 150 buys and 150 sells. That’s $3000 worth of fees alone.
Did I also tell you that I made no profit in that year? I was still learning my game.
I’ve never seen such a big loss in my investment capital. Never.
I swore that I’d never do such thing again. I vowed to pull up my socks and do real work.
The next year, my investment strategy improved. Except that I still lose money. No profit.
But it was different this time.
My losses were much lesser. My strategy was getting better.
Three years later, I achieved my ‘virgin’ gains. I closed the year 2013 with double-digit profits for the first time.
How did I do it? Ok, I’ll share with you.
To trade or invest well, you need one thing. It’s called a proven system.
A system that can work during a bull or bear market.
Let me ask you a quick question.
How do you usually get ready for work in the morning?
First, you’ll go to the bathroom to wash. Brush your teeth, shave and shower.
Next, you put on your clothes followed by breakfast or coffee.
It’s the same thing with a proven investment strategy.
I’m going to let you into my investment routine.
Every morning, I’ll log into a stock screener to filter for stocks that fit my criteria.
Next, I study their balance sheets and company statements. I want to understand their business better.
After that, I will look at their technical charts. I want to see if there is any stock that offers low risk in buying.
Once I’m convinced that I found the One, I’ll hit my excel spreadsheet to check the capital that I’ll allow to invest. (Psst…it's the most important step.)
And that’s it! But remember this.
In the world of stock investments, it’s never about making money. It’s always about capital preservation.
Do you know what Warren Buffett's famous two rules are?
Rule No.1: Never lose money.
Rule No.2: Never forget rule No.1.
If the billionaire is preaching about such rules, then he must be right. Isn’t it?
So there you go!
I’d like to share a relevant quote from Bruce Lee.
"I fear not the man who has practiced 10,000 kicks once, but I fear the man who has practiced one kick 10,000 times."
Figure out how to master one strategy. Be awesome at it.
It’ll take time, of course. Rome isn't built in a day.
Don’t bluff yourself.
Hey, here’s good news. You can speed things up too. Grab a mentor, read books for ideas. Or attend workshop or courses.
Open your mind and learn new things.
If you like what you read so far, remember to share this post on Facebook. Also, tell me in the comment section:
What is that one single thing you did right that made you a tidy profit in stock investment?