Better Investing

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Kenny Rogers wasn’t kidding when he said “You got to know when to hold’em and know when to fold’em.” Sure, his grammar sucked, but everyone got the point. Sometimes the best investing you can do, is the investing you actually don’t do. Why? Because better investing involves preservation of capital. As usual, when you invest in the stock market, you run the risk of losing everything, so you can never have a frivolous attitude about losses.

Better investing requires an investment in time and research

Everyone who invests risks capital. The old saying is “the greater the risk, the higher the reward”. And that is true to a degree. But better investing doesn’t involve taking risks just because you think that will make the reward higher. Instead, you invest in stocks when you’re sure the odds are stacked in your favor. You never want to bet heavily when the big boys or the people on the other end of the trade hold all the cards.

No matter what you invest in, you have to do your research. You hear people stress this advice often and the reason is clear. You always do better when you control your emotions with your intellect. When you’re emotional, you tend to make a lot more mistakes than if you adopt a sober, analytical approach. It’s easier said than done, but it’s key. And the best way to put your mind in charge of your emotions is to actually know the reasoning behind your trades. If you can answer all of the objections that any investor would have, and you find it easy to do, it means you’ve thoroughly researched your subject and are ready to invest.

Better investing requires time, dedication, and effort. But the returns are well worth it.

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