There is a lot to investing, and there is even more to investing successfully. An investment education is ongoing, but it must begin with an understanding of the most important principles.
Win some, lose some. The goal of investing is to make more money than you lose–not to never lose. Why? Because it is impossible to ever fully eliminate the risk of losing. While any successful investor knows this and works around it, newbie investors tend to believe that a loss is a failure, which is simply not the case.
Strategy is everything. So, how do you work toward winning more than you lose? By developing an individualized investment strategy and sticking to it even when emotions run high. Investment strategies vary from investor to investor, as they are based on individual preferences, goals, personalities, and financial circumstances. Only you will be able to determine what, exactly, your investment strategy should be, and it will take a lot of education, time, patience, and trial and error to figure it out. If you skimp out on this principal of investing, you can bet that you will never be successful at investing.
Human psychology runs the market. It is understandable that this simple fact so often confuses investors who aren’t fully enmeshed in the intricacies of investing. The market is controlled by what economics experts called “the invisible hand.” This refers to the way in which the market balances itself out organically (naturally, without human intervention) in response to the law of supply and demand. If you are to understand how this works to influence market movement, then you need to understand human psychology, as it is this that ultimately makes people buy and sell. Learn about trading psychology and you will be much better able to predict (and capitalize on) movements in the market.
Diversify. It’s never a good idea to have all of your eggs in one basket, so to speak. The best way to protect the money you put into investing is to diversify your holdings. That means distributing your investment funds amongst a variety of investment instruments, in order to spread out your risk.
Investing is a very complex undertaking, and it can take you literally decades (or even a lifetime) to learn all of the ins and outs of investing. Make sure you do your homework, research everything, do some Stansberry research, and find a pro you can ask questions. If you want to be successful at investing, then you had better start out your education with the fundamentals. Once that foundation is firm, you are ready to branch out in your expertise and grow into the investor you want to become.