Are these 4 Investment Habits Costing You Thousands?
You’re probably making these investment mistakes without even knowing it.
When it comes to investing, having a healthy mindset is the difference between earning hundreds of thousands of dollars, or even millions, through stocks, or losing everything you have.
Mindsets are fundamentally important. A mindset is a set of fundamental beliefs or assumptions through which you think, decide, and act. Understandably, they play a huge role in the long-term success or failure of your own investments. That’s why it’s so important to have a healthy mindset when it comes to investing.
Have a healthy mindset, and you’ll be predisposed to make good investment decisions -- such as the free net net stock ideas I email subscribers each month. You’ll automatically lean in that direction. Have an unhealthy mindset, and you’ll constantly making investment decisions that set you up to lose large amounts of money.
So what mindsets do you have which are costing you thousands of dollars, or even hundreds of thousands of dollars, in investment losses? Four of the most common, and most dangerous, are listed below. Make sure to read through them to guard against a devastating financial future:
You’re eager to make profits investing in value stocks. I get that.
But your desire for a certain outcome has little impact on whether that outcome is achieved or not. This isn’t basketball, school, or business, where you can just will your way to an outstanding record. In basketball, a strong desire to succeed, to win, often translates into more work, more hustle, more shots taken …and more baskets.
Not so with investing. When it comes to investing, aiming to achieve a specific return means stumbling into a major investing trap. Here’s how and why it can be so fatal.
Are You Breaking One of Benjamin Graham’s Key Rules?
In Adam Smith’s “The Money Game,” Smith talks about a family of investors who managed to buy Coke when it IPOed. Not bad!
The original buyers passed it on to their children, instructing them never to sell the stock, who in turn instructed their own children to do the same when they took ownership. It was just too good to give up.
Having owned the stock for decades, the family’s net worth was into the tens, or hundreds, of millions of dollars -- but each generation lived an average middle class life, in an average middle class suburb, working average middle class jobs. Clearly this is too long to hold a stock.
Contrast that to day traders, or even my friend from Vancouver who was looking for a windfall in a matter of months. When it comes to investing, knowing how long to wait patiently is fundamentally important. Here’s what you need to know.
Does Benjamin Graham Think You’re a Gambler?
Benjamin Graham would not consider many of today’s value investors actual investors. Investing is not just buying and selling stocks or bonds. There’s a lot more to it than that.
The essence of investing is seeking out adequate profit while minimizing risk. As Graham once wrote, an investment operation is one in which, after careful study, promises safety of principle and adequate return. Failing to focus on protecting your downside means abandoning actual investing in favour of risky speculation.
Unless you’re a master speculator, actual investing will help your wallet grow far fatter. Here’s how to make sure you’re on the winning side.
How Value Investing Stock Screeners Sabotage Your Portfolio
Are you using stock screeners or financial websites like Google Finance to pick your stocks, without diving deeper into the firm’s actual fundamentals? We need to talk.
Financial screeners and financial websites such as Google Finance or Yahoo! Finance have major structural problems that just can’t be overcome. If you stick to only using these tools then you set yourself up for large investment losses sooner or later. Here’s why you have to dig deeper.
You Need Great Stock Ideas
Smart value investors are starting to wake up to the fact that it doesn’t pay to spend weeks building a high performance stock portfolio if you don’t have access to the best stock ideas. That’s why, in just 6 months, over 1300 investors have signed up to receive free net net stock ideas. No catch, no obligation, no risk… just free net net stock ideas that you can use.
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