What are the common mistakes investors make?
It is very simple, the mistakes most investors make is to not stay within their area of understanding.
What does this mean?
This simply means, that you need to be able to stay within your circle of competence and to do this over a long period of time.
If you can stay within your circle of competence and you can find businesses with durable competitive advantages, you can create
massive wealth in the stock market. Most people stretch their circle of competence and this leads to making poor investment decisons.
The poor investment decisions are made because people are focusing their efforts on analyzing businesses they do not understand.
If you are doing this than you are making a big mistake. You have to be able to stay within your area of understanding and
be able to do this over the long term. If you can stay within your area of understanding, you can create massive wealth in the stock market.
The key to success in stocks is to stick to your area of understanding.
Another common mistakes investors make is that they do not learn enough to make intelligent investment decisions.
What does this mean?
To succeed in investing and to beat the market, you have to out learn everyone else. There is no secret, well: there is 1 and that is
the only secret is that there is no secret.
If you do not have intellectual curiousty for investing in stocks, you will limit yourself in regards to how much money you
can make over the long term. The key is to focus your efforts on finding investments that are super good by simply knowing more
about the business and industry that those around you.
People who make 30,40 and 50% returns are those who know more than their peers.
So the question is simple: How do you learn more?
This one is easy, you figure out how you learn and you study you ass off and this will put you in a position to be able to
create the 30%+ returns over the long term. You need to be able to focus your efforts on finding investments that are going to
be super valuable over the long term. If you can find a business that is going to produce value over the long term. You will make money
and the skies the limit.
Another mistake investors make is, they think diversification is neccesary. It is not. The people who beat the market have a
smaller portfolio of a few high quality investments. 5 good investments will help you create tons of wealth over the long term.
You do not need many investments to get rich, a few will do it. If you focus your efforts on finding high quality investments,
you put yourself in the best position to succeed.
A huge mistake which is commonly made is to copy other people's portfolio's. Do not do this. Do not.
It is a massive mistake, the investment is as good as the value behind it and the price at which you paid for it.
You can't just copy someone elses portfolio and expect massive returns, a few people can pull it off. But for the most
part, you have to be able and willing to use independant thinking to create wealth in the stock market. Thinking for yourself is the
key to beating the market attaining the big returns in the stock market.
I hope this article was of value,
Much regards,
Jagdip
It is very simple, the mistakes most investors make is to not stay within their area of understanding.
What does this mean?
This simply means, that you need to be able to stay within your circle of competence and to do this over a long period of time.
If you can stay within your circle of competence and you can find businesses with durable competitive advantages, you can create
massive wealth in the stock market. Most people stretch their circle of competence and this leads to making poor investment decisons.
The poor investment decisions are made because people are focusing their efforts on analyzing businesses they do not understand.
If you are doing this than you are making a big mistake. You have to be able to stay within your area of understanding and
be able to do this over the long term. If you can stay within your area of understanding, you can create massive wealth in the stock market.
The key to success in stocks is to stick to your area of understanding.
Another common mistakes investors make is that they do not learn enough to make intelligent investment decisions.
What does this mean?
To succeed in investing and to beat the market, you have to out learn everyone else. There is no secret, well: there is 1 and that is
the only secret is that there is no secret.
If you do not have intellectual curiousty for investing in stocks, you will limit yourself in regards to how much money you
can make over the long term. The key is to focus your efforts on finding investments that are super good by simply knowing more
about the business and industry that those around you.
People who make 30,40 and 50% returns are those who know more than their peers.
So the question is simple: How do you learn more?
This one is easy, you figure out how you learn and you study you ass off and this will put you in a position to be able to
create the 30%+ returns over the long term. You need to be able to focus your efforts on finding investments that are going to
be super valuable over the long term. If you can find a business that is going to produce value over the long term. You will make money
and the skies the limit.
Another mistake investors make is, they think diversification is neccesary. It is not. The people who beat the market have a
smaller portfolio of a few high quality investments. 5 good investments will help you create tons of wealth over the long term.
You do not need many investments to get rich, a few will do it. If you focus your efforts on finding high quality investments,
you put yourself in the best position to succeed.
A huge mistake which is commonly made is to copy other people's portfolio's. Do not do this. Do not.
It is a massive mistake, the investment is as good as the value behind it and the price at which you paid for it.
You can't just copy someone elses portfolio and expect massive returns, a few people can pull it off. But for the most
part, you have to be able and willing to use independant thinking to create wealth in the stock market. Thinking for yourself is the
key to beating the market attaining the big returns in the stock market.
I hope this article was of value,
Much regards,
Jagdip
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