It is very important to realize that your investment portfolio is a dynamic, living thing that needs attention on a regular basis. This includes acquiring new investing skills as well as making sure that you understand the economy that underpins all of your investments.
Overall, the single most dangerous mistake you can make is to live in a world of complacency. When you aren’t looking for ways to grow and develop as an investor you will lose your chances of making money. Perhaps even worse, when you aren’t paying attention to your portfolio, you could lose everything you have because you didn’t act quickly enough to protect your money and assets.
Information is Useless Without Action
Consider a situation where you picked a series of blue stock companies to invest in, and then found a really exciting book that described Formula 1 investing. From there on out, perhaps you also learned about the benefits of indexed stocks vs managed mutual funds.
Even if you become very knowledgeable about how stock investment works, that information will do no good if you don’t apply it. For example, if your portfolio still contains many mutual funds that are taking a loss, you will be well served by converting to indexed stocks.
Never Stop Acquiring Information
When Benjamin Graham essentially pulled the United States out of the Great Depression, hundreds of students, including Warren Buffet sought to improve upon his initial design. Chances are, you already know that Buffet and other investment gurus are constantly on the lookout for new investment strategies.
No matter whether they decide to work with trade signals, options, or some other means to protect their investment, they are in a constant state of acquiring new knowledge.
If You See Value, Act On It With Prudence
It is very important to realize that not all information is useful. For example, if you read a stock investing guide from the 1980‘s, it will say nothing about investing in web based IT. On the other hand, if you miss out on this ever expanding industrial sector, you will be losing out on many chances to make money.
That said, just because you see some valuable advice, it does not make much sense to sacrifice everything and then lose. In the arena of stock investing there is truly a thin line between the power of discernment, excessive complacency, and taking foolish risks.
As you learn more about the art and science of stock investing, you will soon realize that it takes years to become proficient. While you may have a gift for spotting winning stocks, it will truly take time to hone your skills and acquire enough experience to understand how corporations and investor actions impact your ability to make a profit.
If you feel yourself becoming too complacent, start looking for new information and seeing how you can use it. Typically, as long as you are still asking question and moving forward, you have the chance to make money and enjoy more of it during your retirement years.