Investing is a long-term journey

Investing is a long-term journey

You can think of investing as a long-term journey, a veritable marathon, with many starts, stops, changes of scenery and occasional bumps. Moreover, we believe you will be much more likely to achieve your investment objectives if you know what to expect along the way. Your own psychology and ability to handle the emotional ups and downs of investing are likely to be important determinants of your long-run investment success. In securities markets. These risks include currency fluctuations; political uncertainty; different accounting and financial standards; different regulatory environments; and different market and economic factors. The securities of small, less well known companies may be more volatile than those of larger companies. Value investing involves the risk that the market will not recognize a security’s intrinsic value for a long time, or that a security thought to be undervalued may actually be appropriately priced when purchased. Dividends are not guaranteed, and a company currently paying dividends may cease paying dividends at any time. Diversification does not guarantee a profit and does not protect against a loss in a declining market.

The Big Picture

Finding companies you know is only the beginning; the circle of competence is only meant to help you stay within your arena of expertise. Once you have generated a list of the companies you understand, the next step should be conducting an analysis of the financials. Don’t worry — you don’t have to be a finance whiz to understand the basics of the stock market. Investing is less about the stock price and more about the value of the business — is it a good one? 

Successful investing is more about learning over time and slowly expanding your circle of competence. For now, stick with what you know and focus on the long term. Anyone can find success in the stock market; you just have to keep it simple. As Buffett has famously said, “You don’t need to be a rocket scientist. Investing is not a game where the guy with the 160 IQ beats the guy with 130 IQ.” And you know what? $60 billion says he’s right.
                                                                                               Warren Buffett

Source: marketstechno

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