It’s not your neighbor who once gave you awful advice on a hot stock tip (you’re no longer on speaking terms, unless you need to borrow a power tool).
It’s not one of those “market pros” you read about on CNBC who seemed so sure about this one stock that he called it a no-brainer (you bought the stock and this no-brainer has gone no-where but down).
It’s not the market which always seems to be sizzling until you jump on the bandwagon and then it just crashes (must be some kind of bad luck).
It’s not your parents who tried to teach you to save money; instead, you spent all your money partying in your college days (now, you barely have any money to invest).
Nope, don’t look any further. Your worst enemy when it comes to investing… is the person in the mirror.
If you took a hot stock tip from your neighbor and bought a company you had never heard of and the stock tanked, you’re the only person to blame. The reason you bought the stock based on the tip you accepted was because you were greedy when you heard from the neighbor that the stock he bought went up in price.
If you are a regular visitor on CNBC and buy a stock on a whim because one of those “market pros” recommended the stock, you can only blame yourself. The reason you bought the stock that was recommended was because you wanted a quick gain and you relied on someone’s opinion instead of researching the company yourself.
By the way, you should know that there’s a pretty good chance those market pros already own those stocks they’re recommending and they’re doing some cheerleading. I call it a legal “pump and dump” scheme. It’s similar to those scams where the fraudsters inflate the price of penny stocks artificially through false and misleading information on the internet and sell out at a high price leaving duped investors with penny stocks that plummet in value.
If the market always seems to be crashing after you join the party, don’t blame lady luck. Yep, it’s that person in the mirror again who you need to squarely put the blame on. The reason you jumped on the bandwagon is because you could not stand to see people around you make fast money and you wanted to get your share of the fast cash.
So what’s the point of all this?
The point I’m trying to make is that until you take full responsibility for all, and I mean ALL of your investment decisions, you cannot achieve success in investing.
Successful investors always take responsibility for their actions. They make mistakes but instead of blaming the market or anyone around them, they focus all their energy and efforts on learning from their mistakes so that they can make better investment decisions in the future.
Ultimately, there’s a direct correlation between your investment knowledge and your investment success. You cannot have level 1 investment knowledge and expect level 10 investment results. It would be the same as not being a very handy person but somehow thinking you can completely renovate your kitchen without any help.
Looking back, it’s easy for me to see that when I started investing in my mid-20s, I didn’t know anything about investing. Sure, I had a few killer trades where I pocketed some serious cash in a few days but if I look at my overall returns over the period I traded in and out of stocks, I barely broke even.
I was at level 1, yet somehow I thought I could get level 10 results. Now, I’m at level 8 and getting level 8 results. I keep learning every day; I just can’t wait to get to level 9 and eventually level 10 in the near future.
Becoming a successful investor is not easy, but it is simple. The more you know, the more you grow. The more you learn, the more you earn.
About the Guest Author: Joe’s success in real estate has allowed him to become mortgage-free by the age of 32. Now, his passion for investing is leading him closer than ever to his goal of retiring before 40. Joe firmly believes that life is too short and precious to just “make a living” or have a 9 to 5 job simply to pay the bills. He wants to share with his fellow Canadians everything he has learned in order to help them achieve financial freedom as soon as possible.If you would like to read more articles like this, you can sign up for my free weekly money tips newsletter below (we will never spam you).