The most common commitment I’ve heard from my clients over the years is, “I’ll do something with this spare cash by the end of the month.” The second most common is that they’ve committed to becoming a better investor.
But how? How does one become a better investor?
The answer is simple in concept and difficult in execution.
Educate Yourself
You have to learn. Practice. Read. Becoming a better investor is all about adding to your experience (hopefully not with painful losses). You can improve your experience by keeping up with financial news, by attending classes and workshops, by reading books and blogs, or by watching videos by professionals, like our own advisors here at Zenith.
Ask Questions
Most of all, improving your investing chops comes from putting aside the notion that you know enough, or are a better investor than anyone you know, or that the hard-won wisdom of experienced traders is a trick or a trap. Once you’re open to learning you’ll immediately begin to make more considered choices and start asking questions: why did this investor make this choice? How does their circumstance compare to mine? What was the result of their choice, and what would I have done differently in their position? Why?
Learn from Everyone
Everyone comes to investing from a different level of experience. Your career, upbringing, and academic studies will have given you insights that your peers don’t have, and will have given you blind spots that your peers don’t suffer from. Be aware of where you are in your investing journey, and think about what investors you admire have experienced that you haven’t.
I recommend the practices below for everyone, regardless of experience or background, and I’ve laid out some concepts grouped into basic, intermediate, and advanced topics that you may want to look up, discuss with your financial advisor, or read about here in the future.
Do This:
Make a habit of reading 15 minutes of financial news a day.
Start a book on investing, the markets, or economics.
Find a trusted source of financial advice – not a friend, a professional – and subscribe to their newsletter or twitter. Compare their recommendations with what you’d have done and ask why they differ.
Create a ‘paper’ account: an investing account that uses fake money and real market information. Use it to practice new strategies, take long-shot bets, and make mistakes.
These are just starting points. If you want to become a better investor, reach out and ask us how. We'll help you identify areas for improvement, and make sure you're incorporating your own trading into your overall plan.