Take it Seriously; Investing is a Profession, Not a Hobby
Last week we discussed how a professional approach was required for any of life’s pursuits we desire success. We used the analogy of Tiger Wood’s professional approach to his golf (forget his hobbies!) and how few investors took such an approach with their investing. Much like my woeful golfing performance, many investors fail to achieve their financial goals.
Let’s bring this back to your investing. I’ll say your investing because I certainly don’t treat my investing like I treat my golf. You see, apart from the small (ever so small) cheque Australian Stock Report send me for writing this column and presenting at their Live Data Trading Workshops, my investing is what pays the bills. I simply can’t afford to take this for granted. If I want to succeed, that is to beat the markets and grow my wealth in such a way that I rely far less heavily on other forms of income, which then helps me spend more time doing what I enjoy the most – spending time with my family (not golf), then I must be professional in my investing approach. It’s simply too important’ not to be. My investing simply can’t be a hobby if I want the results I seek…
This means that I must bring all of the traits to my investing which Tiger employs for his golf. Discipline to commit the necessary time to do my analysis and research. To create a well researched and robust trading plan. To implement this plan religiously and through ongoing feedback and response to improve it. I must take the time to make all of this happen and not be so arrogant that I ignore help from those who have gone before me and have themselves achieved the success I desire. I’ve got to take this seriously.
Now my question to you is: “How seriously are you taking your investing?” Is it a hobby? Are you one of far too many “punters” I talk to about their investments who say things like “Yes, I have a few stocks…yes I think they’re going ok…” Whose approach is most often one of “Oh, yes, well I read the financial section of the paper and a couple of financial news websites and try to pick blue chip stocks; then I just stick them in the bottom drawer and hold on.” When pushed on the time they’ve spent developing their approach, the answer is invariably: “Oh, yes, I keep an eye on things.”
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Remember what I said before about my lack of time to practice, and that I end up doing my practice in game-time on the run? Does that resemble your investing? Do you feel that you’re learning on the job? Or should you be learning and honing your skills before you put your hard earned money at risk in the markets?
If you feel like you’re feeling your way as you go, then it sounds more like someone talking about a hobby than a serious business! There’s far too much to chance! Where is the discipline? Where’s the perfect practice? Where is the relentless application and drive to improve, succeed, and exceed?
Let me make one thing very clear here. If you treat your investing like a hobby it will no doubt give you some fleeting pleasure from time to time, like my golf, but also like my golf it is going to cost you money. Whether that be upfront in the form of dismal losses during a bear market, or whether that be from underperforming the index in a bull market – it’s going to cost you.
So how do you ‘get good’ at investing? Take a leaf out of Tiger’s book. A coach is a good place to start, an investing coach in this case. Someone who knows the rules of the game who can make objective decisions as to where you’re going right and wrong – and on how you can continuously improve.
It’s not enough to say: “I’ll just bash away at it until I get it! I’m ok – I don’t need your help I can figure this out myself…” Remember what we said last week: It’s not practice which makes perfect, rather, it’s perfect practice which makes perfect. If you have no idea what the correct approach is in the first place, it could take you many years and a small fortune before you figure it out.
Real professionals spend many years and the same small fortune at university studying to achieve their qualifications. They seek out knowledge, structured, researched and proven knowledge. They aren’t so arrogant to say that they will figure it out themselves. Imagine if a brain surgeon said “Don’t worry I’ve read a few books on cracking heads and it’s been a hobby of mine for ages now – I think I’ve got the hang of it so get on the table!” Why should investing be any different? Get some help, go to investing university!
This is where our Live Data Trading Workshops come in. In these workshops my colleagues and I spend 2 whole days trying to get to the heart of what makes you tick as an investor and how we can make you a better one. More importantly, we will give you a number of tried and tested systems and processes to go through before, during, and after each and every investment you make to improve your consistency and results. Keep in mind however that whilst we can show you exactly when and where to enter an investment, we can’t give you the discipline and passion to follow such a plan! That’s up to you.
We all want the benefits of improved investment performance. The rewards of such improvement could be lifestyle changing. However, are you prepared to put in the hard work to achieve these rewards? Most investors aren’t. Your biggest impediment to becoming a better investor is simply getting started, to committing to your improvement by becoming more professional in your approach. The hard work begins now.