| Without a doubt in my mind, I believe that the main | | | | successful investors. To succeed in stock exchange |
| reasons that most people are unsuccessful as | | | | investments, it is vital to firstly keep up to date, but |
| investors are a lack of both preparation and discipline. | | | | if possible to stay ahead of the pack. This might |
| Investment in any form is a show of faith in the | | | | mean reading trade journals, the annual reports of |
| future, optimism if you prefer. Whether you are | | | | competing firms, company reviews, interviews and |
| buying property, antiques or stocks, you are | | | | much more. This ongoing education is vital to success. |
| displaying your positive outlook for your future years. | | | | As computer technology has advanced and |
| Yet despite this obviously good intention, many | | | | investment analysis tools that only a few years ago |
| people make dreadful investments and lose large | | | | were expensive and highly specialised have |
| amounts of money. This optimism can become | | | | proliferated, the basic learning process for an investor |
| blinding and prevents us from seeing obvious risks or | | | | has changed. |
| pitfalls. If we do see them, we may discount them or | | | | Should it? |
| fail to understand their potential implications. | | | | If plotting points on a graph hepled to truly |
| Therefore, understanding the nature of risk is a key | | | | understand the workings of a moving average or |
| lesson that all investors should try to learn before | | | | stop loss system, why stop? This used to be |
| they begin to invest directly in companies quoted on | | | | 'investment 101' but is now a task to be downloaded. |
| the stock exchange. | | | | For many investors, it was the most valuable |
| For years, investment newcomers were advised to | | | | investment they made. They learned to invest and |
| start by choosing a few companies and investing on | | | | to understand the workings of the stock exchange. |
| paper. In other words, the new investor would follow | | | | They learned a skill, for others a trade. |
| the progress of the company and share price | | | | This time and investment in learning will help the |
| without actually buying. Each day a new plot on a | | | | decision making process of an investor for years to |
| hand drawn graph of the company would help the | | | | come. It may both earn and save many thousands |
| investor to understand just a little more. | | | | as the years pass. |
| Over time, the investor might spot trends between | | | | Is this a process that you have taken? To |
| the company and a leading index or sector. The price | | | | accompany all the reading and theory that goes with |
| might move in odd and unpredictable ways causing a | | | | investment generally, paper trading is an important |
| desire for more understanding and education to | | | | pillar in understanding both investments and the stock |
| explain these mysteries. | | | | exchange. |
| This desire for new knowledge is a core trait of | | | | |