Personal Financial Planning: Will You Rent Or Own Your Stock?
Although very few realize or will admit it, many people seem to approach, investing in stocks, in a rather short-term rather than long-term way and mindset. When you invest, will you invest as if you were renting or owning the shares you buy? In most cases, those looking for quality companies, instead of searching, get rich quick, get closer, minimize their personal risk (in the long run), and, if done wisely, get a better overall return. . rate of return, on time! With that in mind, this article will try to briefly consider, examine, review and discuss what this means and represents, and the possible risks and ramifications etc.
1. Constant trade/turnover, versus, buy and hold: Some people check their portfolios much more frequently than others. Whilst, in the short term, this can lead to profit etc, it often doesn’t fare as well, over a longer period, taking into account expenses, market changes, changing economic times, etc. The buy-and-hold approach, however, generally requires much more homework, study, and consideration to fully consider whether you are choosing the right type of company.
2. Doing due diligence: A wise, educated and prepared investor usually does better! When you do your due diligence, you maximize your chances. Choosing a quality and wise course of action requires an excellent dedication to due diligence and a commitment to avoid – proceed – hasty! Consider management, industry, corporate dedications, etc., and proceed wisely!
3. Long term, proactive, versus, impulsive and/or reactive: Thoroughly consider, in advance, what you are looking for and identify those companies that might best meet your needs, objectives and priorities. Be thorough, demanding, but also patient! Avoid choosing based on rumours, feelings, advice, short-term fads, or other impulses, etc., and rather proactively, carefully, choose wisely for the long term!
4. Evaluation of the company, compared to the general market: Beware of the market – time, but rather pay much more attention to the specific company, rather than the market in general! When you avoid, overconsider, the short term and the inevitable market swings, you minimize speculative risks, etc.! Thoroughly research all aspects of the corporation in question, learn about its management, history, plans for the future, relevance, and strategic plans as well as action plans, and choose wisely!
In most cases, most people do much better over time when they go for the longer-term approach, rather than the shorter one. Are you ready, willing and able to become a smart investor?