Keeping Your Eye On The Prize: Tips For Beginner Investors.
Updated: Nov 8, 2018
We’ve now taught you the basics of investing, as well as shown you how to actually get started in the market.
If you’ve jumped into the investing world, you’ve likely noticed it’s not as easy as it looks.
Here are five key things to remember for beginner investors that will help you keep your eye on the prize:
“The greatest gift you can give somebody is your own personal development. I used to say, "If you will take care of me, I will take care of you. "Now I say, I will take care of me for you, if you will take care of you for me.” ― Jim Rohn.
“Work hard at your job and you can make a living. Work hard on yourself and you can make a fortune.” ― Jim Rohn.
“Leadership is the challenge to be something more than average.” ― Jim Rohn.
“Those who will not read are no better off than those who cannot read.” ― Jim Rohn.
“The difference between where you are today and where you'll be five years from now will be found in the quality of books you've read.” ― Jim Rohn.
''Success is something you attract by the person you become ”
― Jim Rohn.
As you continue your journey and gain experience in the investing world, here are some things to keep in mind:
1. Even most experts can’t pick winning stocks After a few successes in the investing world, it’s easy to get overconfident and to think that you have the skills to always pick new winners. But nearly all academic research says that this is false. If this is a losing enterprise for even the best stock pickers, then it probably won’t work for you, either.
2. Getting past our primitive brains The human brain still has many built-in evolutionary functions from our hunter-gatherer days. These cognitive biases don’t mesh well with investing, often making the brain your own worst enemy. Seeing past things like loss aversion bias, recency bias, bandwagon bias, and others can be a key driver of success in bull and bear markets.
3. Resisting the urge to time the market The temptation to time the market is contrary to what really works in investing, which is to invest for the long-term, and stay in the market. The reason: if you miss any of the best days of the market, it can completely erode returns.
4. The cost difference The power of investing comes from annual returns compounding over long periods of time. While this is largely driven by investment performance, it’s also important to realize how much costs can play a role – in fact, high costs can cut a portfolio’s return in half!
5. Getting risk tolerance right You want your portfolio to have the highest average return, given the highest risk you are prepared to accept. If you take on too little risk, you will not make headway on your journey to financial independence – and if you take on too much, investing will seem like an uncomfortable roller coaster day-to-day. Source: Visual Cap.
“Each of us has two distinct choices to make about what we will do with our lives. The first choice we can make is to be less than we have the capacity to be. To earn less. To have less. To read less and think less. To try less and discipline ourselves less. These are the choices that lead to an empty life. These are the choices that, once made, lead to a life of constant apprehension instead of a life of wondrous anticipation And the second choice? To do it all! To become all that we can possibly be. To read every book that we possibly can. To earn as much as we possibly can. To give and share as much as we possibly can. To strive and produce and accomplish as much as we possibly can.” ― Jim Rohn.
“The ultimate reason for setting goals is to entice you to become the person it takes to achieve them” ― Jim Rohn.
“Happiness is not something you postpone for the future; it is something you design for the present.” ― Jim Rohn.
“Your life does not get better by chance, it gets better by change.” ― Jim Rohn.
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