In this post, I am going to talk about the stock market and the importance of identifying your plan.
At first, I believed everyone in the market has the same goal; to make money. While this is the main motive for investing, we cannot assume everyone's plan to get there is the same. I soon discovered the impact and importance of staying true to your plan, by reading “The Psychology of Money” by Morgan Housel.
Are they looking for a short-term gain? Long-term? Who knows?
More importantly, it might not match your plan.
My investing journey began in March 2020, when the stock market was crashing due to the pandemic. I had no clue how impactful the crash was until later, but I knew there was an opportunity to make money.
I wanted to test the waters, without too much capital for me to risk. So, I decided to try options(contracts) as a way to generate income. Cluelessly following many investors on Twitter & Youtube, I would follow their actions if they seemed reasonable. I later learned that it’s better to be reasonable than rational in some investing situations.
With a lot of luck and risk, I was able to make a decent amount for which I was proud of. I even showed it off, but that quickly faded away as my luck started to wore off. Heading close to negative, I decided to cash out and put my money back into my savings account. I learned two things…
- We cannot predict the future of the market at any given time.
- This style of investing did not match my values.
While I originally believed the stock market was a ‘get-rich’ quick scenario, I quickly encountered the other side of the coin. Eager to learn more, I decided to look back at history and noticed one strategy that seemed to me as a ‘universal truth’. Like Mr. Buffett and many other credible investors, longevity, and endurance to stay true to your plan will deliver results.
I discovered many of my influenced options tradings came from individuals looking for a short-term opportunity. To say the least, my 6-month graph was looking like an endless rollercoaster heading to a stop and I wanted to make a change.
Acknowledging and changing your strategy is perfectly fine! I can confidently say that the advice I had given myself back then, is like taking advice from a stranger. The more you know about the companies you invest in, the more confidence you will have behind your decisions.
With a lot of research and help from a community sharing the same goals. I was able to change my strategy to fit my tolerance. Everything comes with a price and for the stock market, it’s volatility. I invested in companies that I believe will continue to deliver results based on their past record, as well as my future predictions. Instead of looking like a rollercoaster, it’s starting to look like this…
As someone with low capital, I continued to regularly invest ($150/month) + occasional bonuses into quality companies, which I hope will return good results.
If you are curious or thinking about investing, I urge you to always continue learning. By self-analyzing your decisions, you will be able to find an investing strategy that will work for you best.
I hope this post brought value and perspective that I don’t see around. I would love to hear any feedback to improve my future writing! Thank you!
