There is so much information available about different sectors, different shares and different economic situations that sometimes it is difficult to remain focused. We all need to listen, learn but more importantly take nothing for granted in the markets. At the end of the day it is your decision to invest in any particular company or sector and you will benefit or pay the price.
Experts with reputations
If you look back 20 or 30 years ago there will be a whole array of different experts giving their opinions on stock markets around the world. There are very few who stand the test of time although the likes of George Soros and Warren Buffett certainly stand out. They have been there, done it and bought the T-shirt and are certainly worth listening to. However, some of the so-called experts of yesteryear have fallen by the wayside, seen their voices diminished and are unlikely to make it back onto the top table.
No shortcut to education
While many people make significant returns by following experts and market trends, in some ways this is a flawed strategy without market education. Why are you following a particular sector? Have you analysed the different economic scenarios going forward? The reality is that it is all good and well following the markets but unless you react quickly enough you can end up on the wrong side. If you have the market education to go with this enthusiasm then you might be able to pre-empt a change in the trend and make your own decision.
You can’t buy experience
You can read all of the books, visit all of the websites but there is no better education than experience. This is why the likes of George Soros and Warren Buffett live to fight another day while many of their previous counterparts have fallen by the wayside. We have all seen experts changing their views like the wind to make them look better as the markets move against their original ideals. There is nothing wrong with changing your opinion if the market changes but doing so to better your “public persona” is cheap.
Never stop learning
Whether you win, draw or lose on an investment you should never stop learning. If you can take one educational element out of every trade you do then this will store up a massive knowledge bank which will help you in years to come. We only need to look back towards 2008 and the US mortgage crisis which ultimately led to a worldwide economic depression. Nobody in living memory has been through such a difficult economic time and while it may not occur for another hundred years or more what can we learn from this?
The moment you stop learning is a very dangerous time in your investment career as it gives the impression you think you “know everything”. Listen, learn but take nothing for granted where the stock market is concerned. Investment markets around the world have a habit of biting you in the backside when you think you have got the better of them. Always be on guard, always try to think one step ahead and do not be afraid to take a loss if that is what your head says even if your heart says otherwise.