THE EVOLUTION OF AN INVESTOR
This is an excerpt from the book 'The Hitchhiker's Guide to Stock Investing'
Whether you are new to stock markets, or you’re a seasoned trader, you will need to realise that all investors go through a process of evolution. If you think stock investing is a ‘get-rich-quick scheme’, allow me to disappoint you. It isn’t.
Stock investing will not, and should not, change your bank account overnight. For that kind of thrill, you’re better off buying a Lottery ticket. Of course, the problem with the Lottery is that the statistical likelihood of you winning is so low that it simply isn’t worth your time.
Stock investing, if done right, can lead to a sustainable increase in your net worth over time. That should be your aim and expectation — nothing more, and nothing less. The evolution of a stock investor is directly related to their knowledge, experience and net worth.
Rest assured, you will make many mistakes. As a result of those mistakes, you will lose money. However, by reflecting and learning from those mistakes, you will evolve and improve as an investor. Through the process of evolution, your investment system (something I will discuss at great length in later chapters) should become more robust. Your mindset should become more resilient and thoughtful. And the income you amass as you invest should rise in accordance with this.
Arguably, the greatest obstacle to a stock investor’s evolution is their inability to learn from mistakes. Think about it; if you invest $20,000 into a company stock, only to lose 50% of your invested capital due to a mistake, it’d leave you feeling devastated.
If you effectively learn from that mistake, you will be able to avoid making that same mistake a second time. You will increase your future returns by way of loss-saving. Unfortunately, large losses can often leave rookie investors feeling upset and angry. Some may even choose to stop investing altogether. If that’s the case, you will lose out on the 100%, 1,000% and even 10,000% growth opportunities in your net worth over time.
Disclaimer
The material in this publication does not constitute and is not intended to be professional advice, it is general comment only. It is not intended to give guidance to any particular circumstance or personal situation. It is not to be used as the basis for making any decision, to take action or not take action on any matter which it covers.
Readers should always obtain professional general or personal advice before making decisions. To the maximum extent permitted by law, the author and publisher disclaim all responsibility and liability to any person, arising directly or indirectly from any person taking or not taking action based on the information in this material, or any content contained in this publication.