If you have any knowledge about the trading and investing segment of the financial industry, you’ll be well aware of the famous notion that for every winner there simply has to be a loser. That’s certainly the case with regards to something like CFD trading, which is something a brutally objective onlooker may refer to as outright gambling. For every winner, there does indeed have to be loser and somewhere in between these winners and losers are two key players who always win. These key players include the company whose stocks are being traded and the broker — perhaps even more so for the broker because the company itself could turn out not to be as profitable as they might have liked in their organic marketplace.
So that’s basically where you have to look if you want to adopt the essential habits of a successful investor. Invest in THE PROCESS as opposed to what the process is telling you to invest in. Simply put, you want to be the closest thing to being a broker as is possible, broken down in the following simple actionable steps:
Investing in Dynamic Education
This is true for traders as well, but even more so for investors who focus on longer term gains as opposed to the intra-day gains targeted by traders, that being the fact that most of your time should be spent conducting research and educating yourself in that way. The total amount of time you spend executing your trades and investments should be way, way less than that time you spend researching those trades and investments.
This is how you learn about relationships between seemingly unrelated markets which can have you in for a really big payday, or indeed see you realising some slow but steady and safe growth levels. Your knowledge of a specific market should go way beyond what is placed right in front of your eyes because that’s where all the money is to be made. How many times have you ever heard the likes of Bloomberg or CNBC talking about the spike in financial claims associated with financial products such as packaged bank accounts and even PPI claims? These things aren’t mentioned because going the extra mile to uncover such elements is what gives successful investors the edge over those who are too focussed on what the process suggests to them as opposed to the process itself. To the successful investor there is a clear link between the state of the markets and something like an accelerated market dealing specifically with financial claims.
Risk Spreading
The puzzle is completed through spreading your risk. No matter how much of a sure bet a certain investment or a certain group of investments may be, always leave room for disappointment by physically making provision for a recovery plan to be implemented should things not go according to established trends and there’s a so-called black swan event.
Risk spreading simply entails diversifying your investments, but staying within a certain theme so that you still have an overall knowledge of every corner in which your money is parked.