My Investing Mindset
It’s all about your mindset.
As my investing journey developed, I decided to take note and write down some of the principles I invest by. Here is "My Investor's Mindset". Please note, these are my own thoughts based on my investing experience. Always do your research before making any investing decisions.
Know thyself.
Some people get sucked into the market and love to control their portfolio. Others prefer to “set it and forget it”. As you begin your Stock Market journey you will need to decide how you would like to start and what your first purchase will be. Do you want to pick individual stocks and have control of your portfolio, or would you rather invest in “baskets of stocks” otherwise known as index funds or ETF’s that track the market and let it do its thing? Reflect on what you’re comfortable with and start there. There is no one size fits all. The important thing is to get started and invest.
Start small.
I started with $500. Even that amount felt like a lot of money to me because I was scared I would lose it. There is no need to put large amounts of money as you’re learning. Get your feet wet and start small. As you get a better understanding of what you’re doing you’ll gain more confidence investing more money. If possible, start off with an amount you’re comfortable losing or don’t need.
Invest in what you believe in.
When it comes to your precious money you want to invest in companies that you believe in. Companies that are solid, have a good reputation and can stand the chance of time. I know it can be overwhelming picking companies, but a good strategy is looking at companies whose products you own and love. Who owns those products? Why are you a loyal consumer? Do they have a competitive edge? Once you decide on a few companies, do your research to see if the company is in good financial shape.
Think long term.
That takes us to the next topic which is to do your research! If you’re not prepared to learn about what you’re putting your money into, maybe investing in individual stocks is not for you. Just the same way you do your research before you buy a car or purchase a home, the stock market is an investment platform as such and deserves the research. Doing the research will protect you in the end. In addition doing the research will empower you. This doesn’t mean spend hours on end researching everything there is to know, but at least understand the basics which will give you the confidence to do this for the long haul. Confidence in what you’re doing and trusting the system is a big part of investing in stocks. Confidence in what you’re doing will help you weather the storm when it comes. And it will.
Don’t let your emotions dictate your moves.
Fasten your seat belt because the stock market is a roller coaster and you need to have the stomach to ride the ups and downs. History has shown that those that stay the long course and are patient are rewarded in the end. It is very tempting to sell when you see your portfolio diminishing, but that’s when the opportunities are there! Stay cool as a cucumber and enjoy the ride. No need to panic. If you’ve done your research and you’ve invested in good companies, you know they’re not going anywhere. Whatever the market is experiencing is temporary. You can think of the market as having emotions- one day it’s happy, the next day sad or angry because something triggered it. It doesn’t mean it will stay that way forever; it’ll eventually come back to its happy self.
Shop the sale!
When the market dips it’s time to rejoice! No time to panic! Time to buy! If I can get a certain stock for half the price, why not! I love a good sale and stocks are no different. The people that panic and sell are creating opportunities for me; the patient, non emotional shopper that is looking for a good deal. Remember, this only applies to great companies that you know have a solid foundation, and will most likely bounce back from any market downturn.
Contribute often
Just like a savings account it’s good to autopay yourself. Some folks like to buy shares every month, others periodically. Do what works best for you. Just make sure to put some money aside every month (or every paycheck) if possible.
