As much as I love stock investing and trading, and have followed the market gurus like Warren Buffet, George Soros, and Peter Lynch, I have also been an avid follower of John C. Maxwell for more than 10 years now. His principles on life and leadership have deeply affected every aspect of the way I conduct my business.
Last week, he returned to the Philippines for another amazing seminar where I got immersed in an afternoon of learning. I learned so much from the principles that he shared that I tried to apply them to my personal investing. That’s why for this post, I would love to share a few snippets of what John Maxwell shared and how it can be used in stock investing. Hope this helps as you refine your skills and move toward financial freedom!
1. “The moment you develop yourself, that’s when you grow.”
Being good at stock trading and investing does not happen automatically. You need to devote time and effort to learn the rudiments of how to select stocks and how to find the best time to buy, sell, and hold on to your stocks. You have to learn more about the company that you plan to buy, and look at financial ratios and valuations to see if the company is truly profitable, and will grow for the long term. You have to learn how to read charts so that you do not just buy stocks just because your friend told you to. The more you develop yourself, the wiser investment decisions you will make. Thus, the greater the prospects of your money to grow.
2. “Hope is not a strategy. It never has been and it never will.”
Hope is an amazing thing to have in life but it will make you lose money if you buy stocks in the hope that your stock will move up. A bad stock will not go up no matter how much hope you have. Earnings and public perception of growth is what will drive stock prices both for the long term and short term. That’s why as an investor, you must surround yourself with measurable strategies that should determine whether you buy the stock or not.
3. “If you only work on your weakness, you will only become average."
There are so many styles and methods to make money in the market. You do not need to follow what others are doing, but rather you must find a style that fits your strengths, skills, risk tolerance, and lifestyle. If you are good at reading charts and love using them for timing, focus on that and build your skills around technical analysis. The same is true if you love looking for value stocks that are cheap and growing. Just keep focusing on that and ignore the crowd.
You have to find something that you are good, enhance it, and just do it over and over again until you hit your financial goals. You have to be the best at what you are good at!
4. "Everyone starts but not everyone completes."
The stock market does not go up in a straight line. It will always have seasons when you see nothing but just red, and there will also be times where you think the market will never go down. Regardless of what situation you are in, I encourage you to stick to your financial plan no matter what happens. People easily quit when they experience a loss in their trades or when they don’t get their expected returns. That’s part of investing – markets move up and down but your success is dependent on how you treat each situation and find a plan on how you can be profitable in spite of the condition. Your goal is not to play a perfect game but rather to maximize your gains, minimize your losses to reach your goals for financial freedom.
5. “To grow, you need to put yourself in a situation with people who are bigger and greater than you.”
One of the quickest ways to grow in investing is to find people you look up to and get them as your mentor. When I was starting out, I would just sit and learn from people I respected in business and investing. My mentors helped speed up my learning and also prevented me from going through the mistakes that they made. Their experiences are worth gold and what they can teach you and what you can learn from them is something that goes above and beyond what you can get from a seminar, podcast, or a book.
6. “The longest distance to success is trying to make it through a shortcut.”
There is no such thing as getting rich quick. The reason why people get scammed or even lose money in investing is because of the idea that they want to hit it big and hit it fast. There is no substitute for starting early, starting small, learning the ropes, and letting your money work hard for you as you grow in skill and knowledge. A lot of the people who get burned in stocks are those who get blinded by the idea of getting rich by just one trade that they often don’t see the attendant risks. Your goal is not to be profitable just one time, big time; it should be to earn repeatedly year in and year out until you hit your financial goals.
These are just a few things that I learned from last week’s seminar. I hope that this can help in you. It is my biggest desire to see more Filipinos financially free and help this nation grow back into greatness. – Rappler.com