Greetings once again, and thanks for returning for another exciting entry on developing a success mentality for investing. We’ve been covering the ways in which the most successful investors look at the market, and the things they pay attention to when determining risk and value.
With so many players in the stock market, it’s easy to feel lost among a tide of people making major choices on a daily basis. You may be wondering how they all factor into the values of companies, and what their behavior does when it comes to choosing investments for yourself.
Acting On Stock Market Trends
One of the things taught to us early with investing is to be original and pioneering, to act against trends, think outside the box, and beat your own path. If stocks are being snatched up, you should sell, sell, sell, throwing yours to the market to obtain immense profit. If people are selling theirs at a loss, then you should work quick to snatch them up.
There’s value in that behavior, but it’s not a sealed deal for success. Rather, it’s just another investment strategy, and one that is dependent on constantly changing factors that the most successful investors evaluate on their own terms. When it comes to stocks, sometimes it is a good idea to follow trends and stick with the herd.
For example, if a stock is falling, waiting it out before making a purchase may be a good idea. Others will flock to it in the hopes of realising profit, only to see that it continues to fall and gain back a small amount of value. You, on the other hand, decided to wait until the stock hit the bottom, so that your investment gained a considerable return when a portion of the stock’s price returned.
The basic principle at work here is that the market is flexible, and so there are many opportunities that exist beyond what people have come to expect. It’s simply a matter of learning to evaluate performance on your own terms and not by what “common sense” strategy told you.
That’s it for the sixth chapter. We now have one more to go in this series detailing how you can employ effective thinking for making your investments successful! Stay tuned for more next week!
Sean Rasmussen
The Bullhunters Guide
Universal Wealth Creation © 2004 – 2010
{ 6 comments… read them below or add one }
As a Newbie, I am always searching online for articles that can help me. Thank you
That’s great to hear Phyliss. If you are considering getting into investing at some stage, I wish you all the best of success.
Regards – Sean
I like the idea of acting against trends. It seems that when someone is recommending a stock anymore, they are only looking for a way to exit their trade.
Stock recommendations are definitely something be cautious of AMH. I guess that is one of the reasons for this series on success mentality, never go with something just because someone recommends it. Stick with your strategy and do your research before investing in other peoples assumptions.
Regards – Sean
Hi Sean,
I see more and more that investing is an individual thing. There is lots of advice on what to do for every investing situation but ultimately it comes down to what you think works for you.
I guess this is the value of paper trading. You can practice all the various strategies and find your own investing style before you outlay any money.
I can’t sing a mentors praises enough. For me, I like to be taught by someone who knows the ropes. It’s just my style of learning.
When we are taught by someone we admire for their success and do what they teach us, we don’t let our heads get contaminated with too many ideas from lot’s of people that pull us this way and that.
Instead we can trade methodically learning one system at a time until we feel we are successful in that method and then move on if we feel it is necessary.