Investing Made Simple by Uncle8888 (5)

Read? Investing Made Simple by Uncle8888 (4)

What was Uncle8888 doing in the stock market during the 80s/90s?

If Uncle8888 has recalled correctly; in 80s/90s he was just drifting along in the stock market without a clear and definite investing Goal as he didn't even know what he actually wanted from the stock market.

He was just hoping to strike more IPOs and would be happy to be able to make some money from selling "lucky-strike" IPO stocks. He didn't have any big ambitions from making money from the stock market.

Sometime, he might follow some investing tips from his office/brokers into some stocks. From times to times, he might get lucky and made some money and other time he might get stuck and became a long-term passive income investor. It might take a few more years for him to finally get rid of these stuck positions sometime at break even costs or lower after collecting some dividends.

Uncle8888 did a Mind Flip

Read? Reading and Mind Flip (2)

After that mind flip he finally realized that the best way to get out of Rat Race without becoming another Rat in a different form e.g. doing more part-time jobs was through the Investment Quadrant.

He finally realized that to succeed in his investing journey he would need a very strong motivation and full commitment to do whatever it took to do it well. At last, he finally has a CLEAR AND DEFINITE INVESTING GOAL i.e. to reach FINANCIAL INDEPENDENCE.

To reach this goal, he has put in lots of his time and efforts into educating himself on financial literacy and finding out what might work for him and discarding those that clearly didn't work well towards his Investing Goal. He also kept revising and refining those that seen working fine for himself to remain relevant in the ever changing market conditions of bull and bear cycles.

Looking back, Uncle8888 realized that he did the following to stop himself from drifting along the stock market:

1. An End In Mind - Having a Clear and Definite Investing Goal helps.

With this investing goal, he knew exactly what he wanted from the stock market. He knew that he has no better choice but to succeed in the investment quadrant in order to get out of Rat Race.

Read more on investing goals? Portfolio Management - Measuring your success!

BTW, Uncle8888 realized that many retail investors too share the similar goal; but often it lies in the strength of their belief and the level of their commitment in reaching towards that goal.



2. An End in Mind is Not Enough
 
Uncle8888 knew that having an End in Mind is only the beginning and it will be never enough for him to reach that End in Mind. He knew that he needed to track and measure his investing performance towards that End. From times to times, he needed to find out the following:
 
Was he progressing well at the right paces towards his End?
 
Was there any setbacks and obstacles that needed to be overcome?
 
In another word, he kept reviewing his 3M's and sometime he did a reality check on his investing life journey by doing some simulation on the type of CAGR expected on his investing capital in order to take him  from "where he was" to "where he would like to be ". He then proceeded to change or revise his investing strategies when it became necessary and hoping with the changes he could still remain on the right path towards his End.  He strongly believe that he needed to be reasonably good and be focus at all three aspects of his 3M's.   Read more on 3M's?.

BTW, Uncle8888 realized that many retail investors thought that they are tracking and measuring their investing performance when in fact they are just doing detailed recording of their stock transactions or having a view of their portfolio's cash flow. Recording is not measuring. Learn to know the difference will definitely help you to progress well in your investing life journey in order to effect changes when it may become necessary.


To be continued in the next Weekends ...

CH said in his email to Uncle8888: "I was struck by your name, the 2 processes of Long Term and short term trading are mentioned and these are what I've been struggling with since I began."  Uncle8888 may do a post relating to it.