Setting An Investment Goal
Trading in the stock market is appealing to many people. Oftentimes, their curiosity is aroused when they hear success stories from friends and/or relatives. These anecdotes create a sense that investing in stocks is simple and easy. In a way, that may be true but before one dives in, they should understand the amount of experience the person telling the stories has in stock trading.
Experience has taught these people what to do and what not to do. More than that, experience has taught them that diving right unprepared will only lead to failure. In order to avoid failure, one should set a goal first before taking that first step into the world of stocks trading. The equation isn't very difficult--experience plus realistic goals equals better chance of success.
Experience has taught these people what to do and what not to do. More than that, experience has taught them that diving right unprepared will only lead to failure. In order to avoid failure, one should set a goal first before taking that first step into the world of stocks trading. The equation isn't very difficult--experience plus realistic goals equals better chance of success.
I have heard some first timers say "I want to make a fortune in stocks." That's a goal alright but to be perfectly honest, an unrealistic one. It is a very bad idea to start investing with hopes of becoming rich overnight. It could happen, but let me be the first to tell that it very rarely happens.
Realistic goals are not about figures, but rather what to do with the figures that come in. To better explain this, let's use the "I want to make a fortune" illustration again. If you decide to target an income of say, $1,000,000 and stop there, you will very likely get caught in a "chasing rainbows" situation. Visualizing a mountain of money and seeing yourself diving right into it often leads to impulsive and misguided decision-making especially when you begin to see that things are not working out according to plan.
But if your goal is to make a million so that you can use the funds to pay for your children's education and also to buy a new house, then you have more concrete goals. These kinds of goals will very likely make you realize that you have to make wiser decisions in your investment so you can achieve what you are working towards. It is safer to invest your money in such a way that it will grow slowly over time.
In short, before you invest a single penny, sit back and really think about what you hope to achieve with your investment. Knowing and formulating a realistic goal is what will help you make smarter investment decisions along the way.
With regards to the experience aspect, you're probably asking how will you gain the experience when you're just starting out. The answer is to gain the experience of others. Talk to the people who told you their success stories and ask as many questions about investing in stocks. If these are people you trust, they will certainly share helpful information with you.
Another way is to hire a professional in the field. They will help identify all the areas and options that are available for you to invest in and which are the ones that will make money safely and at what pace. Licensed stock brokers are mandated to give realistic information because they have to answer to the law if they don't.
It all basically boils down to the fact that investing requires more than calling a broker and telling them that you want to buy stocks. It takes a certain amount of knowledge and experience in the market to able to invest successfully. And in the end, the goals that you set will eventually dictate the level of success that you achieve.
Realistic goals are not about figures, but rather what to do with the figures that come in. To better explain this, let's use the "I want to make a fortune" illustration again. If you decide to target an income of say, $1,000,000 and stop there, you will very likely get caught in a "chasing rainbows" situation. Visualizing a mountain of money and seeing yourself diving right into it often leads to impulsive and misguided decision-making especially when you begin to see that things are not working out according to plan.
But if your goal is to make a million so that you can use the funds to pay for your children's education and also to buy a new house, then you have more concrete goals. These kinds of goals will very likely make you realize that you have to make wiser decisions in your investment so you can achieve what you are working towards. It is safer to invest your money in such a way that it will grow slowly over time.
In short, before you invest a single penny, sit back and really think about what you hope to achieve with your investment. Knowing and formulating a realistic goal is what will help you make smarter investment decisions along the way.
With regards to the experience aspect, you're probably asking how will you gain the experience when you're just starting out. The answer is to gain the experience of others. Talk to the people who told you their success stories and ask as many questions about investing in stocks. If these are people you trust, they will certainly share helpful information with you.
Another way is to hire a professional in the field. They will help identify all the areas and options that are available for you to invest in and which are the ones that will make money safely and at what pace. Licensed stock brokers are mandated to give realistic information because they have to answer to the law if they don't.
It all basically boils down to the fact that investing requires more than calling a broker and telling them that you want to buy stocks. It takes a certain amount of knowledge and experience in the market to able to invest successfully. And in the end, the goals that you set will eventually dictate the level of success that you achieve.
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