In the spirit of sharing, we’ve put together a special series of tips for investors collected from throughout SparxTrading.com’s collection of great articles, interviews and reports. Be sure to check back here daily through December 25th for the latest tip or follow us on Twitter to get updates on when they’re released.
Investor Tip #12: Know When to Take a Loss
This gem was provided to us from veteran trader Victor Adair as part of the series Mistakes Investors Make. Click to read about why Victor Adair thinks its crucial that investors know when to take a loss.
Investor Tip #11: Take Ownership of Your Investing Decisions
This next tip comes to us from an interview with Josef Schachter. In our interview, he shared some brief but insightful comments for investors. Chief among his thoughts was the importance of knowing what you (as an investor) are choosing to invest and who you’re choosing to invest with. Read more of what Josef Schachter had to say here.
Investor Tip #10: Buy the Business, Not the Symbol
Ryan Irvine, from Keystone Financial, provides this piece of investing wisdom. Often times investors can get caught up in the hype of a particular name or stock symbol and forget about what it is that gives the stock real ‘value’. Click the link to learn more about Ryan Irvine’s perspective on avoiding this common investing mistake.
Investor Tip #9: Build a Solid Foundation
The saying goes, “it is a wise man who learns from his mistakes but it is a fool who doesn’t learn from the mistakes of others.” The benefit of hearing what experienced investors have to say about getting involved in markets is highlighted in this video on getting started with investing. Noted expert on business valuation Ian Campbell provides his 10 timeless tips for all investors to consider when participating in stock markets.
Investor Tip #8: Pick the Right Advisor for Your Needs
When it comes to investing, there is no shortage of opinions or trading styles. Learning to find the right financial advisor for your investments, however, entails finding someone who you can share ideas and opinions with and who shares a similar style of investing. In this video tip, Reg Ogden shares his views on how to pick the right financial advisor.
Investor Tip #7: Make Sure to Have a System
Whether you prefer technical trading or value investing, having a system (and the discipline to follow the rules of the system) is crucial to successful trading. For beginners, there are some additional considerations that need to be made before jumping in to the investment pool with both feet. Find out what 3 tips Danielle Park has to offer for beginner investors.
Investor Tip #6: Trading is Simple but not Easy
Many people believe that trading on the stock market basically comes down to making a few clicks with a mouse and magically money will appear. What many of those people don’t realize is that trading is about making decisions that involve money – and the risk of losing it. That little cognitive monkey wrench can wreak havoc when it comes time to decide what actions to take and when to take them. These tips from Stockscores founder Tyler Bollhorn help to explain why trading may be simple but not easy.
Investor Tip #5: Trading is Not Gambling
While the element of uncertainty is common to both trading and gambling, there is a big difference between speculating with structure and simply guessing to be entertained. Read more about this concept in the summary of chapter 3 of The Mindless Investor along with two other really important points related to becoming more aware of your investing personality.
Investor Tip #4: Becoming a Successful Trader Takes Time and Training
Becoming a great trader or investor doesn’t happen overnight. Like any skill, trading takes time and effort in order to be mastered. Today’s tip comes from chapter 5 of The Mindless Investor, which explains why taking it slow and steady is the better way to improve as an investor.
Investor Tip #3: Use Your Size to Your Advantage
Unlike most institutional investors, retail investors aren’t going to be managing multi-million or billion dollar portfolios. For that reason, the kinds of trading opportunities and strategies that smaller investors can take advantage of are sometimes out of range for larger players. In this series of tips from chapter 6 of The Mindless Investor, find out how smaller traders can use their size as an advantage.
Investor Tip #2: Remember the 3 D’s of Investing
With all of the information and/or noise that investors have to filter through, one of the best tips for investors to remember is to try and keep things simple. Unfortunately, that’s easier said than done. There are, however, 3 important traits that all successful investors and traders share. Read more about how the 3 D’s of investing: Discipline, Diligence and Decisiveness, can help improve your trading or investing performance.
Investor Tip #1: Consider the Risk vs Reward
If there were a golden rule in trading or investing, considering the risk vs reward on any transaction would be it.
All experienced traders and investors accept that there are going to be instances where they ‘get it wrong’ or when they ‘get it right but at the wrong time’. The savviest traders and investors, however, manage risk from the outset by identifying whether there is a plausible prospect for a reward, and whether that reward substantially outweighs the risks (usually by a factor of 2 or more) associated with the trade. By focusing on those candidate trades that offer a better risk/reward profile, not only are you shifting the odds for success in your favour, but you’ll also likely make fewer trades and have an easier time researching opportunities and managing your portfolio.
We hope you’ve enjoyed the 12 days of investor tips. One of the great things about trading in the stock markets is that it changes constantly and so it requires a commitment to lifelong learning in order to stay in top trading form. Whether you’re a passive investor or an active trader, remember to keep earning you have to keep learning.
Have you got an investing lesson or tip that you would like to share? Feel free to do so in the comments section below.