Follow These 5 EASY Steps to Immediately Progress in Investing!

As an investor who has delved deeply into various stocks and the market, these five tips are ones I wish I had known sooner. They have enabled me to unlock more potential in myself and my strategy.

I've been involved in the stock market since I was 18 years old. At that time, I didn't have the courage to start investing yet—a silly mistake, I admit. I began investing later on, starting with a small amount. Looking back, I wish I had started sooner, and I wish I knew the following five steps back then so I could perform as well as I do today. These steps are realistic, easy to implement, and easy to follow, so you can start right away. Let's not waste any more time talking; let's dive into the tips!

1. Stop Following the Masses

I've been guilty of following the crowd, especially the so-called super investors, pundits on the news, and gurus on social media. However, blindly following this large group has often led to significant setbacks for me. I used to immerse myself in researching a company, analyzing their statements, keeping up with the news, studying other investors in the stock, and checking various sources, only to find contradictory information that shattered my thesis. Consequently, I would end up selling the stock altogether.

In many instances, this approach resulted in missing out on owning companies that eventually delivered great returns with outstanding management, somewhat aligning with what I was initially seeking.

This experience taught me to stop blindly following the masses and to take everything with a grain of salt. I now trust myself and my research enough to make well-thought-out decisions regarding my investment strategy and the outcomes I aim to achieve with it.

2. The 15 to 20 Years Rule

This is a simple yet highly effective rule of thumb for me. I believe that simplicity, which I also apply to my investing approach, is something we should value more. Nowadays, everything related to investing seems to be overcomplicated, while simplicity is actually ideal for successful investing. Instead of making things harder, we should strive to make them easier.

However, that's not the main point.

When I analyze a company, the very first question I ask myself is, "Will this company still be relevant in the next 15 to 20 years?" or "Will this service or industry remain relevant in the next 15 to 20 years?" Asking these kinds of questions encourages long-term thinking. It prompts you to become more future-oriented rather than solely focusing on short-term gains. Investing is about owning valuable assets for the long haul and standing by the company's decisions over an extended period.

Adopting this approach has helped me filter out many "promising" companies that I see offering no added value for the future. There are various factors behind this, which could be explored in another article.

3. Take Some Time Off(!)

We've all experienced it. You spend weeks studying companies and analyzing fundamentals without taking a break. Even when you're asleep, your mind is consumed by thoughts of financial statements. Well, I've definitely been there too, haha! I'd find myself dreaming about companies, their management, future prospects, analyst ratings, and more. There were times when I couldn't even sleep because my mind was fixated on a recent company I had been researching deeply. Crazy, right?

It's important not to spend all your time dissecting every aspect of a company without taking breaks. This can ultimately impact your decision-making in the long run, leading you down different paths and forming varying opinions. Take breaks, go for walks, hit the gym, and connect with nature. There's so much insight to gain from being outdoors!

I experienced this firsthand with Starbucks. After studying their fundamentals intensely for a week, I decided to take a break and relax at one of their locations, enjoying some hot cocoa (I don't drink coffee, haha). This allowed me to clear my mind while still making progress towards my investment goals in a more enjoyable way.

Give it a try, and you'll feel refreshed and delighted!

4. Quality Over Quantity

The title speaks volumes!

Investing in quality companies often yields greater returns than spreading your cash across numerous companies. Investing in a proven business model and company almost guarantees better results than allocating funds to various projects with uncertain potential. Some investors consider this approach a safe play, while others dismiss it as nonsense. It's up to you to decide which stance to take. From my personal experience, I've found that investing in quality assets provides me with more peace of mind, modest returns, and a overall more stable portfolio, which I prefer over anything else.

Imagine having investments in numerous stocks with "huge potential." This would require you to monitor them daily, constantly worry about market moves, and keep you on edge throughout the day. Instead, opt for a quality business with a proven and, wherever possible, future-resistant model. This approach will lead you to your investment goals on a more stable journey.

5. HAVE FUN!

I need to learn to prioritize them, haha. This one should definitely be number one!

If you despise delving into financial statements, analyzing management, scrutinizing products or services, and all other aspects of a business, then investing might not be for you. Some aspects of investing can be challenging to develop a passion for, and that's okay. If you're not interested in these tasks, there are funds available that can manage your investments on your behalf for a fee. This fee is essentially payment for outsourcing these tasks, which can be worthwhile if investing isn't your cup of tea. However, always ensure that the fund aligns with your goals and preferences before investing.

Personally, I thoroughly enjoy immersing myself in companies and everything associated with them, so outsourcing isn't the right choice for me. I derive genuine joy, although it might sound strange, from researching and absorbing everything a company has to offer.

So, find enjoyment in what you're doing or learn to love it. Otherwise, consider outsourcing it.