When you start investing, the main goal shouldn’t be “become rich”, but it should be “protect your capital and let it grow and work for you”. In this video we will focus on 4 points every investor should consider before starting his journey.
1. Patience
Patience always pays off. Without a robust level of patience, it’s possible to implement a valid investing or business strategy. Do not think of becoming rich in one day. In the real world, using the right level of risk that allows you to sleep peacefully at night won't double your account in a flash. Expect during the journey very long times during which you just need to wait. Lack of patience can be stressful and cause issues. But if you will be patient in the long run, keeping alert, the best opportunities will come to you, without you running every day, trying to chase them. Sometimes doing nothing is as important as taking actions. This is because as investors or entrepreneurs, the number one priority should be to preserve our capital and both not to waste time and money. Once trends and opportunities begin to emerge in a market, you shouldn't simply jump on a load of transactions immediately. You must continue to be patient and wait for the best configurations, being careful not to overexpose yourself to related markets.
2. Business Mindset
You should consider each single investment like any other business. After an adequate education and mentor before starting., you will have to research the product, deploy the strategy, and execute. The mindset you want to have must be created every single day by repeating the same actions, adding something small every day, whether it’s something you learn, or study, or discuss with others. You’ve got to set the example first of all to yourself, that any obstacle you encounter during your journey won't define you, nor cripple your convictions.
3. Risk management
Risk management is another skill that is essential when it comes to investing and being an entrepreneur. If you don't know when you're risking too much, that's a problem. The greater the risk, the greater the losses and disadvantages you will encounter. If you feel now you can't handle those losses, you will most likely not last long as an investor or entrepreneur. Only risk what you can afford to lose. If you wake up at night to the thought of losing money, then you are risking too much. It is not a problem to be more risk averse. In fact, this might help you become less risk-averse, and maybe see even high returns. This is because risk management helps you look for the best possible opportunities while limiting yourself to negotiate your risk tolerance.
4. Ignore your gut feelings
The general rule is to do the opposite of what your instincts are. Even experienced investors are grappling with this concept. The impulse to sell when the market is in free fall, for example, is certainly natural for anyone approaching the world of investments for the first time. Once you sold your assets because you are scared, you stay out of the market until you see signs of recovery, which means you will be watching those early recovery gains instead of benefiting from them. The human being often tends to follow trends, so we must always be aware of what the weaknesses of the human being are and how our brain and our functions work in a fairly predictable way. It’s important to manage the risk through diversification, along with a strong dose of independent thinking, which prevents you from the worst mistakes, which happen when you follow trends, or let market cycles pressure you into trading decisions through the FOMO (Fear of Missing Out).