Is there a secret for successful investing? It has to be, right? Then how can we explain that only a small percent of investors make real money from their investments, while the rest of them are just playing the lottery and in most cases lose their money?
What makes the difference?
There are many theories and many courses who promise you the right answer, but the truth is pretty simple (sometimes the simple way is the better way).
The fact is that successful investors are not beginners and their actions are not based on hazard but on exact science! They make their investments based on numbers not on gossips, after a serious investigation on accountment documents and not after a panic attack and so on.
The point is that successful investors are professionals and not amateurs. Then know how to extract the profit on a growing market but also in times when the market is on the descendent path.
They act like this because they know how to use information and because before to invest in the market they invest in themselves. This is the best secret investments that one can make and can be sure that is 100% profitable.
On the other hand, most investors (although the word becomes problematic in this case) don`t use their reason but their own optimistic dreams and false perceptions about the world, finances, and economy.
Average investor behavior is illogical and often based on emotion. This does not lead to wise long-term investing decisions (no surprise here).
Studies have shown that when the stock market goes up, average investors put more money into it. And when it goes down, they pull money out. This is akin to running to the mall every time the price of something goes up and then returning the merchandise when it is on sale – but you are returning it to a store that will only give you the sale price back. This irrational behavior causes those guys market returns to be substantially less it could be if they would use exact science and not irrational emotions.
The good news, or the secret of investment, is that anyone can learn how to invest.
One can do this reading articles, books or take courses about investments, markets, money and so on! Maybe you will spend some money in the process but look at that money as a real investment because the knowledge that they will bring you, will help you to gain more money.
So, investing in your financial education is one of the best investments you can ever make!