One of the reasons individual investors abandon the stock market is because they fear they can’t compete with the Wall Street pros. And, generally that is true. We can’t compete with them on day to day or intraday trading. They are setting up the game and driving the narrative. They are in the middle of the action and we are home with a computer and a TV and dinner in the over. I’ll happily concede the day trading to the pros. I would rather follow a civilized and proven strategy of investing for the long term.
That is not to say that long-term investing is easy. It is not. Often we are buying in the face of market sell-offs and the talking heads are predicting that it is different this time. That what’s worked in the past, will work no longer.
In my thirty-plus years of investing in and watching market trends, I have found that employing common sense and patient discipline are the primary factors to success as an investor. Following the trends is a dangerous game–you must be incredibly agile or you may just get run over.
So, begin by watching the stocks you are interested in. Observe how they perform in up and down markets. And while you’re on the sidelines you’ll learn a great deal about how the game is played, be more likely to see the train coming. Patience lends perspective and provides cover from the speculators. By watching and learning you will become a better investor when you finally do decide to jump on the stock market locomotive.