The volatility of investor sentiment is one of the reasons people are afraid of the stock market. I understand that. Irrational behavior is scary. That is why one of my tried and true investment tenets is: Know What You Know and Know What You Don’t Know.
As you dip your toe into investing, you will learn that most people have an opinion on the stock market. Almost everyone you meet will tell you they sold all their stocks before the last market crash or their broker got them into the latest growth darling at the ground floor. I often wonder if that were so why their broker is the one driving the big Mercedes? Investors like Dr. House’s patients often lie.
It would be folly to chase their tips or follow their advice. You have no business buying companies you know nothing about. That is irrational.
Know what you know. And know what you don’t know. Buy the companies you understand. Not what your neighbor is buying. Hold to that one tenet and you will keep yourself from zigging when you should zag. And, from buying at the top or selling at the bottom. Smart, long-term investing is about making informed decisions and then staying the course, not chasing the next great growth company. It is about buying companies you know and understand at a good value and letting the company managements do all the heavy lifting of growing and managing the company while you tend to raising your kids or running your household.
Good investing means that when you are aware of what you don’t know, you steer clear. And when you know what you know you have the courage to invest. These are the topics we will discuss in THE INTELLIGENT WOMAN’S GUIDE TO STOCK INVESTING. Stay tuned and follow my blog at nancy.tengler.com/