“Even if you’re on the right track, you’ll get run over if you just sit there.”
One of the reasons individual investors abandon the stock market is because they fear they can’t compete with the Wall Street pros. And, generally that is true. We can’t compete with them on day to day or intraday trading. They are setting up the game and driving the narrative. They are in the middle of the action and we are home with a computer and a TV and dinner in the over. I’ll happily concede the day trading to the pros. I would rather follow a civilized and proven strategy of investing for the long term.
That is not to say that long-term investing is easy. It is not. Often we are buying in the face of market sell-offs and the talking heads are predicting that it is different this time. That what’s worked in the past, will work no longer.
In my thirty-plus years of investing in and watching market trends, I have found that employing common sense and patient discipline are the primary factors to success as an investor. Following the trends is a dangerous game–you must be incredibly agile or you may just get run over.
So, begin by watching the stocks you are interested in. Observe how they perform in up and down markets. And while you’re on the sidelines you’ll learn a great deal about how the game is played, be more likely to see the train coming. Patience lends perspective and provides cover from the speculators. By watching and learning you will become a better investor when you finally do decide to jump on the stock market locomotive.
FROM CHAPTER ONE OF THE INTELLIGENT WOMAN’S GUIDE TO STOCK INVESTING.
This book is for those of you who may just be embarking on a career and have the luxury of a long time horizon to build and nourish an investment portfolio; for those with young families and big dreams; for women who are on their own and intend to keep it that way or are simply farther down the road with fewer years to save and invest for children and grandchildren. This book is for those of you who are consumed by the pace of your very busy lives (and who isn’t?) yet know deep down that saving and investing is something you should be doing though the task seems so massively imposing that you quickly dismiss the idea (if you ever let it percolate into your consciousness in the first place). Like Scarlett O’Hara you can worry about that tomorrow. Except suddenly it is tomorrow and the kids are going off to college with a backpack full of loans and you are puzzling over how you are going to manage to retire, if at all.
Consider these pages as your antidote to the financial market mystique propagated by experts and pundits. Think of this tome as your investing de-coder ring. The strong cup of hot tea that clears the fog of an overcast and chilly morning. My commitment to you is this: by reading this book you will gain the knowledge necessary to navigate the noise of the market and select the stocks of high quality companies for long-term appreciation. You will learn investing is a dynamic process of growth. Like a garden, it requires only that we tend to it with care; that we water and fertilize the soil, that we pull the weeds and prune back the luscious growth to allow for new blossoms. In short, the gardener must acquire and plant and oversee the garden, the natural environment and time provide the rest.
Investing is not without peril and I do not intend to paint a naive or too-rosy picture. There will be storms and short-term losses. It is an inevitable and necessary part of the process. Just as a forest fire clears the clutter from the forest for the healthier growth to emerge, so market corrections ultimately stabilize and poise the stocks of great companies for further growth. Once weathered and understood, these concepts will provide muscle memory to your investment muscles; these trials will allow you to develop confidence. You will instinctively know when to hold back and when to add to your holdings. When to retreat and when to hold firm.
Together we will build knowledge, hone your skills, develop an investment strategy and execute it with discipline.