It is this principle and inner discipline that is needed to be able to become a successful stock market investor. This is also one of the easiest mistakes to make.
One of the keys to making money and good investments is in understanding the businesses and industries in which you invest. Many studies have shown that if you had been out of the market for just a few of the highest returning days of the year, your overall return would be significantly smaller. Logic dictates that you should be buying more of the stock rather than selling. This is one of the reasons that panic and fear play a roll in the market. It is the same as owning a stake in any business and you must act like an owner.
Your stock buying and selling decisions computer monitor arm should be based on the fundamentals of the company and not how you think the market will perform in the future.
In a down market, if the fundamentals of the company remain the same, then a stock will have become more attractively priced if it has gone down. This shows why it is important to stay invested for the long term and not attempt to time the market.
Any investor who buys stock in a good company based on solid research should do nothing more than monitor the company and develop a dollar cost averaging plan. This will over time allow his investment to grow.
One of the costliest mistakes made by investors is based on fear. The best investors use the stock market to buy attractively priced companies and hold them while the business expands and prospers. You should be sticking with your investments long term. In time, his intelligent investing decisions will pay off well as the vaue of his shares appreciate.It is important to understand that good investment strategy is ownership of a stock which represents ownership in a business, not just a ticker symbol and a price.
If you glance down the Forbes list of richest people, you will find that not one of them has made their very large fortunes from frequent trading and trying to time the market. One of the he worst things an investor can do is research a company, make a sound decision based on that research, and when the market hits a bad downturn, sell in fear of losing money. If you focus on the companies strengths and weaknesses, you can remove all other unimportant information and simplify the investing process
