The immediate benefit of stopping your unproductive investing behaviours is better returns. Equally important is that it will free up your time to learn more about investing; leading to even higher returns. What are the 3 most unproductive behaviours that you must absolutely stop? How?
The most effective way of investing is to follow a Process using a System – data, information, analysis, tools and guidance working together in an integrated manner. That’s because It minimizes mistakes and promote productive investing behaviours in addition to a robust investing method. I will show how the design of MoneyWorks4me does this because that’s something I know inside out and while there are others, I haven’t studied them to write about it.
Learn these 3 routines:
Don’t waste your time searching for what to buy. Let Mr Market know your shopping list, your quote and let him get back.
Consume only decision-enabling content
Review your portfolio infrequently
Productive Routine 1: Don’t waste your time searching for what to buy. Let Mr. Market know your shopping list, your reserve price and let him get back.
Searching for stock opportunities to invest in is what almost everyone does, the whole industry seems to be promoting this way of buying. Well, if you are not searching for something you are not useful to anyone, not to google, youtube, tv channels, investing websites, screeners, investing experts, influencers, no, not to any one of them. But it is the most inefficient way of buying things, most of all stocks. Because with stocks it’s not like you are running out of something you need urgently to survive, nor is the market going out of stock, or the best ones are taken and lastly stocks are not a fashion item.
Searching for something has its own perils. Have you gone to the mall, done some window shopping and ended up buying something you didn’t plan on buying? It happens more often than you care to admit. Why? Because in searching you have already incurred some costs in term of time, energy and mental effort and this makes us more inclined to consider buying something because all you need to do now is pay for it. And the sellers are all over active, smart and offering promos and discounts to make you buy. In investing you will be swamped by ads and offers on anything and everything related to investing. You have a slim chance of coming out of a ‘shopping-searching’ expedition without buying something. And if you didn’t buy in this search, you are more likely to buy the next time.
Contrast this to the fact the Stock Market is the most efficient and sophisticated market you can think of and the stupidity of doing the above is apparent. Why do I say that? Do you think companies and the government buys like this. No. They either put out a tender, or invite their suppliers to send their quotations to them and then they negotiate, beat down the price if they can. You can’t do this as a small retail buyer, not for anything. But you can do better than this when buying stocks.
You can tell Mr Market what you would like to buy, at what price and to inform you when any item on your list is available. And you are not obliged to buy it, you can decide that when he gets back. And no one can cheat you on this, it’s as transparent as it can be. Isn’t this a great way to buy stocks. Heck, it’s the only way to buy stocks that makes sense. But you need a way of telling Mr Market what’s on your shopping list and what price you are willing to pay.
A Watchlist where you can set a price alert, is a way of doing just this and many sites provide one for free. And if you know the price you are willing to pay, it works. However, if a stock is available at your price a long time after your set the alert you start wondering if the price you set is still valid. But it works within a reasonable time frame. The challenge is keeping your watchlist up-to-date and that’s an effort that puts off many...........Read More