The gleam and bright lights of Wall Street lure in several new investors annually, only to send them home crying to their family and friends. Why do so many people fail when it comes to the stock exchange? The reason is quite simple: Hard work! Most individuals are searching for a fast buck or a quick path to riches. This isn’t the case when it comes to investing in individual stocks. If you would like to invest in stocks, then treat it like a business, NOT A HOBBY. For example: A retail outfit can not earn money if it does not have goods to market, the same is true for investors, without money, you can not invest. What do I mean? All investors need rules and you want to follow these principles or cash is going to be LOST. If you lose your initial investment, then you’re out of business (just like the retail store). I don’t always care what your rules are but they should be proven and then followed to a”T”.
Consider this for a minute: How long do you spend researching and following up on your investments? Most people will spend more time exploring their next car to purchase, their next pair of shoes, the best suit, the best dress, the best pasta sauce, etc. but the exact individuals seldom spend more than 15 minutes per month researching their own stocks. I know of a person who spends hours clipping coupons (saving pennies to a couple dollars) but only minutes investing thousands in stocks.
This is why nearly all individuals FAIL at investing, because they do not understand what they’re doing, they do not care to know where their money is and they do not know who to hire to spend their money. If you’re not interested in learning how to invest properly with your OWN method of trial and error over several years, I recommend that you invest in mutual funds or comparable diversified vehicles. Over the long term (minimum 20 years), mutual funds and dollar cost averaging will provide you positive results with minimal worries.