Do You Have the Right Temperament to Invest?

silversaver888(81)

Published in

LeoFinance

Words

561

Reading

3 min

Listen

Play

If you don't have the right temperament to invest, don't even start.

Does this sound wishy-washy to you? Investors who pick and choose their investment lose money not because they don't find good investments. Most people find great investments.

The reason why they lose money is that their emotions influenced them and they buy and sell at completely the wrong times.

BTW, it is totally okay if you recognize that you are one of those people that cannot keep your emotions out of investing.

Passive Investing

What do you do if you are an investor and you can't keep your emotions in check?

There has been an investment approach that has gained so much popularity for a couple of decades now... it is called passive investing.

It takes away the psychological aspect out of your investing. It takes away the need to have the right temperament. You don't have to worry about what investments to buy. You don't have to worry about what day when to get in and when to get out. And it produces a great result if you give it time.

That is the second big thing to successful investing. Firstly, you need the right temperament, and secondly, you need to allow enough time for the magic to happen.

I don't know enough to pick the winners, I don't know enough to pick the winning times. But there nothing wrong with that. The important thing to do if you have an overall feeling that this is a reasonable place to have your money over a long period of time is to invest over a long period of time and not make any bet impulsively by putting a big chunk of money in it in any given time.

Just show up every month or every quarter, come rain or shine, and you do this for decades.

Dollar Cost Averaging

Stay the course and remember Dollar Cost Averaging is the way to go. This protects you from your own emotions. It protects you from large market swings.

If you hang in there for a period of time and continue to show up each and every time, slowly but surely you will average out to that average market return. Making monthly low-cost investments over time makes a lot of sense.

I think that significant cash reserves (or what makes one comfortable), owning a piece of America, a diversified investment, bought over time, held for a significant of time... it is bound to do well. The income will go up through the years, and there really is nothing to worry about!

^{I am not a financial adviser. This article is not meant to be financial advice. My articles on cryptos and precious metals share my personal opinion, experiences, and general information on cryptos precious metals.}