The Learning Curve of Investing

How much can you learn simply by studying? You can read books, study information on web sites, attend seminars, and spend months in paper trading. Yet when that is all done, you still do not really understand investing and trading until you put money into a position and find out what happens.

Key Point

No matter how much you study and analyze, you cannot understand the market until you have money at risk.

There are no fast or easy ways to get around the learning curve.
In spite of some claims to the contrary, you need to gather information and knowledge as part of the process of learning how markets work. Some suggestions:The process of deciding how and why to invest or trade is a very individual one. It has to be based on your personal risk tolerance, unending analysis and evaluation, and a matching up of appropriate investments and trading strategies. Every case should be done on a comparative basis, between companies, between fiscal years, and between trading periods. The more comparisons you make, the more reliable your overall understanding of how prices move and how companies grow.
By Michael C. Thomsett
Michael Thomsett is a British-born American author who has written over 75 books covering investing, business and real estate topics.

Copyrighted 2020. Content published with author's permission.

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