Investing strategy is small parts of timing and luck, smaller parts of know how but more often than not it simply comes down to having a long term timeline and the proper temperament. The timeline is simple, you need five years to see any real results, and temperament is the ability to hold your emotions in and way from your actions while everyone else loses their mind. When your portfolio is down fifty percent you can’t rub a lucky rabbits foot to get back in the game, you need to remain calm and act accordingly.
You can make large sums of money by not reacting when the market drops, when there are large fluctuations in the market people flock to sell, and the wealthy flock to buy, because they know the stock is prematurely deflated. Imagine your reaction to just finding out you lost 500 thousand in paper assets, would you have the fortitude to put more money in rather than sell what value you have left? Many mansions have been built not from jumping around from stock to stock but rather carefully allocating your money into companies built for the long term.
In order to get out of the emotional ride you need to take hold of your emotions and focus on the long term. Building a strong back bone against emotional immaturity can take a while so here are some exercises to get you headed in the right direction. You must live a die by this simple motto, I am an investor and NOT a speculator – this must be the words that wake you and lull you to bed.
Make sure you have stock in companies that are growing at a slow and steady pace, this way you can benefit from the increase in share price as well as dividends pay out. If you try to time out the market you will never make gains in the long term, I mean you might as well buy settlements that pay you regularly at a fixed rate
If you are the type of person who is emotionally attached to your money you will inevitably make a bad decision because you will be too focused on the price now rather than the long term direction of the stock. Make sure you are investing in the stock to watch it grow rather than feel good about the rise in day to day stock price. The same goes if you want to buy structured settlements online, you need to take the emotion out of what you think you want the investment to produce and actually focus in on what you NEED the investment to produce to make it a worthwhile use of your money.
Tune out the white noise or background music that comes from the television or radio – imagine being able to avoid the emotions thrown upon the general public by MSNBC and continuing your strategy of buying companies for the long term, you would have been much better off.
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