A mix of Mind, Method, and Money
Creating wealth is a dream where many succeeded, and few tumbledown. A common view - ‘share market’ is the best place to create wealth compared with other streams of work and business. The earnings from the capital market is taken as ‘Investment for passive income’. I will say, it’s all myth where investors land up losing the chunk of investment. Not because it is too risky to invest, but because of the method and the thought process. Share market is trade that needs research and analytical skill to monitor economic factors and daily trend.
By getting the best gun does not make us the best shooter, we have to develop a skill and experience.
Wealth creation is a process where an investor uses a mix of 'Mind, Method, and Money'. A slow process that needs multiple proven techniques, agreed-on principles, and good intentions. It can be summed up based on experiences of traders who have seen the ups and down, twist and turns and have finally survived by slicing the chunk of money load.
We follow;
MIND:
>To see what we want to see.
>There is ‘no beginning’ and ‘no end’ so don’t lose the battle before it starts.
>No rules apply in the market, we have self-created rules based on what we want
>There is no place for emotions in the market.
>It is ok to make mistakes but not ok to repeat them.
>When fear rides the mind, no logic works, so do not catch a falling knife.
METHOD:
>>Buy companies not stock, for the long haul. (we are here, to stay....)
>>Keep away from companies having corporate governance issues, the market discount them.
>>Maintain a long-term average return perspective - 10 years is the target investment period.
>>Work out all options - what happens in the worst situation and how it will be managed.
>>EPS market for passive investment.
>>Study, analysis data, review historical charts, correlate market with trends.
>>Human psychology remains the same even in decades so best to use tested methods.
MONEY:
>>>Have a safety net by knowing ‘how much to buy’.
>>>If you have 2 entry strategies, then we should have 4 exit strategies.
>>>Learn to cut losses and take the hard call.
>>>Find out maximum risk with an exit strategy.
>>>You can be right but lose money whereas you can be wrong but make money.
>>>Make a portfolio of 10-12 Stocks, 2-4 Mutual Funds, Gold ETF. (suggested)
>>>Cut your losses.
Observing differently;
a. An investor need a 'patience of leopard', - The move with caution and slow precision makes them remarkable hunters. This graceful hunter, known for the patience, quality of maturity, becomes a deciding factor of ‘what time is right’.
b. Determination of Eagle, - only focus on goals not on ‘fear’. We know eagle as a fearless creature, symbol of courage and determination. They do not move focus after setting the target. Also, Eagle never eats dead meat and puts effort to eat fresh. The investor needs to study the market, trend, company whereabouts instead of just following others.
To be Right & sit tight .... the toughest thing to do.
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