Nobody has ever found any success as an investor without an actionable plan of attack behind them. Some might argue that the volatile and unpredictable nature of the stock market makes it impossible to plan ahead. I would disagree with that assessment. While you can’t be given assurances for any individual share price, you can have a broader outlook that makes allowances for that.
Many people that venture into the world of investment for the first time do so blind. Perhaps with the help of a consultant, they’re able to traverse the uncertain terrain of the stock exchange. For the most part, they’re able to do well, but could they be doing better?
The return you see on your investments is only ever going to be as large as the effort you put into your strategy. Indeed, cultivating a measurable, responsive, coherent plan will allow you to tackle any eventuality. Most people would agree that they’d like a more cohesive investment strategy, but avoid doing anything about it. Why? Because they’re afraid that they won’t know where to begin.
Well, if consistent performance on the stock exchange is what you’re looking for, you’ll have to factor a few things into your processes.
Start thinking about investment as a business. No, I don’t mean in terms of making money. I’m talking about the way you operate. There isn’t a single business in this world that could operate without a series of disciplined processes. They would be thrown into chaos. In order to counteract that, some businesses even go as far as having a step-by-step process. And they, under NO circumstances, deviate from it. Adopting a similar approach could help you to avoid making emotional decisions, which, as we know, can backfire quite readily.
You can also then begin to spot discrepancies in your strategy, and make changes accordingly. It’s a much sounder approach than firing blindly in the hopes of stumbling upon the problem.
How do you exploit your knowledge and put it into practice? Well, the first thing is to make sure you understand the intricacies of the stock market in great detail. No stone should be left unturned. If anything were to happen on the stock exchange, you should know why. Look at the currently volatile nature of the Alibaba stock price. Do you know why? If not, do some digging and find out. Leave nothing to chance.
Your competition on the stock exchange is fierce. You need to give yourself a way to have a significant advantage over your peers. A greater understanding is perhaps the most effective way to do that.
A final note before I leave. Analyze the different forecasts for stocks. You should identify how your portfolio would perform in any given environment. Prevention, as they say, is better than cure. If you were to be hit by a sudden volatile share, how would you react to it? Just as you can never predict the weather, you can’t second guess the stock market either.