What should be the right mindset for investing?


You cannot have a ‘Heads I win , tails you lose’- attitude when you start investing. Unfortunately, that’s the attitude of many investors when they invest. They want to win all the time. That’s not a positive attitude to have. (Of course, nobody want’s be on the losing side)

Think about it. Is it possible to be on the winning side every time? in that case, who will lose ? to win all the time is an illogical thought. Realize that every time you invest, you will be investing in a group of assets. Some may prove to be good picks whereas some others may not perform at all.  You may have a mix of rising and falling investments and hence, all probability, you’ll have an overall portfolio that may perform somewhere between the best and the worst.

As you start investing, it’s important to have a positive outlook. It’s natural for investors to look back and see missed opportunities that were knocking at them. A simple investing indecision may leave an investor wondering how his life would have been different if he had made the right choice. That’s how every investor’s life is – it’s always understood backwards. However, it’s important not to curse yourself or think negatively. Golden misses are part of every investor’s life. Realise that Self-inflicted psychological damage is difficult to overcome.

So, keep these simple thoughts in mind while you invest –

  • Make sure that you have done your home work well. When you invest your money, you should be clear about the objective- how much profit do you expect? How much time will you hold on to it? Why are you buying it –do you have enough reasons to justify your actions? Most importantly, how much loss are you willing to tolerate?
  • Always try to avoid pointless conversations about what could have been done. Don’t look at the past and count the profits you lost because of a wrong decision you made.
  • Realize that however badly you have done, it could have been worse.
  • Instead of analyzing individual investments, evaluate your entire portfolio. You might have lost in one, but won the other.
  • If you are invested for the long term there is no point in getting worried over the current value of your investments. Current value may be down due to various reasons.
  • If you have been experiencing a streak of good luck, it’s better to slow down. Do not rely on your instincts or gut feeling or excellent luck every time.
  • Cook your own recipe for achievement. Sure, a sound knowledge in every aspects of investing is required to produce a good result. You have to learn from others, use books and web based material a lot. But, make sure you are using the right resources.
  • Investing is a tough and serious business. On the contrary never be too hard on yourself. Relax. Have fun.   Keep your mind clear and concentrated. Having a positive mindset can give you immense results and at  the same time, have fun while you earn your bucks.
  • Always focus on the positive aspects of what you have done.  Take investing like a sport where you win in some games and you lose in some other. But be sure to learn from both experiences-and never forget what you learned.

If you would like to learn more about investing,  check our beginner’s lessons for simple, to-the-point lessons.

Happy investing!

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1 Response to “What should be the right mindset for investing?”


March 24, 2013 at 8:17 pm

Superbly put, You have one more fan here.

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