There is an old cliché that is most often applied to competitive sports that states when you are satisfied with your performance, you are done as a competitor. As tends to be the case with most of the good cliches, the meaning or intended lesson that the phrase is trying to convey can be applied to a broad range of common activities, situations and pursuits. It is of course open to individual interpretation as well, but essentially it is saying that in order to attain greatness, you must cultivate the mindset that it is impossible to attain perfection. That you must always be striving to get better.
Investing is, at least to some extent, a competitive activity. You, as an investor, will find yourself pitted against outside forces all the time, some of the are tangible and obvious, while others are intangible and obscure. How are you going to arm yourself to not only fight off the blitzkriegs, but also go on the offensive when necessary? How are you going to know when it is a good time to go on the offensive? What can you do to remain confident in the face of all the adversity besieging you from all sides?
The easy answer to all of those questions can be summed up in one word: Education.
The More You Know, the More You Know
Do you think Warren Buffet knows everything there is to know about trading and investing? How about Donald Trump? Or, for that matter, do you think anyone can ever know all there is to know about trading and investing? Probably not. So, how much education is enough for you to start investing with confidence? How many classes do you need to take on stocks, bonds and the market itself? There are no cut-and-dry, hard-and-fast answers to these questions, but you can rest assured that your chances of consistent success in the stock market increase or decrease in direct proportion to the number of courses or educational programs you can get under your belt.
Investing and trading with your hard earned money is not a pursuit in which you want to “wing it”. The stock market is as cold and impersonal as the ocean; it does not care about anything, least of all you. When a tsunami destroys a coastal city, it is foolish and downright ignorant to blame the ocean itself for the devastation. If you dive into the market with little to know knowledge of what you are likely to experience, you will definitely receive an education – one you probably can not afford.
Yes, of course, you will incur some growing pains. You will have to go through some trail and error to learn some hard lessons. No amount of education is capable of shielding you from every possible attack on your investments. What education will do, however, is allow you to keep the damage to a minimum and provide you with the mental tools and know-how to fight back.
Editor’s Note: Kathy Acorda writes for http://www.tradingacademy.com/.