You can learn a lot about investing from the amazing Fools at The Motley Fool. For me, I had the privilege of being able to share some of these learnings with you as a reader. However, I have actually learned a lot about ASX share investing through my writing. Here are the biggest lessons I have learned, which could help you with your own share investing.
Confirmation bias is real
A lot of investing resources focus on the fundamental or technical analysis of shares. Looking at the bigger picture, they can also tend to focus on the macro-economic environment. In my opinion, the key to your investing success is closer to home. It’s you.
Humility is an underrated quality in an investor. It will help you to understand your flaws and adjust accordingly. For me, one of my biggest biases is the need for confirmation. That is, I seek out support for my ideas to give me the confidence required to invest.
Whenever you are about to make a share purchase or sale, take a step back to really consider the opposite side of the story. This will open your eyes to the potential outcomes and actually give you more conviction once you have made this consideration.
An investing journal is critical
The share market is volatile. Anyone who was investing in March, or during the great recession, or the dot-com bubble will know this. Considering and understanding your emotions is critical to making rational, long-term decisions in these circumstances.
Writing down your ideas makes you think longer and harder, and provides a great reference point for investing decisions. Being able to see if your original investment thesis is broken is a truly powerful investing tool.
I love share investing
It’s safe to say that I am in love with share investing. It has provided me with an income, growing wealth, entertainment and a lot of happiness. It would be ‘lower-case f’ foolish of me to think that everyone was the same.
If you’re not passionate about share investing, but still want to invest, I would suggest outsourcing it to a trusted person/team. For example, I know that a number of Fools in the United States follow the investments of David Gardner, even when the investments are not 100% within their circle of competence. Finding a trusted and reliable external advisor, such as The Motley Fool, can boost your investment returns, whilst allowing you to spend less time analysing and worrying.
There’s more to life than investing
True investing is a journey. The fruits of your labour unfortunately come later down the track. However, there is more to life than investing in the S&P/ASX 200 Index (ASX: XJO). Set a goal, have a purpose and a reason for investing. It doesn’t matter what it is, big or small, but knowing what you are aiming for will allow you to set the right course, enjoy the ride and celebrate when you get there.
Invest in yourself first
I’m definitely not the first one to say this, but investing in yourself will always provide the greatest returns. Prior to writing for The Motley Fool, I had very limited writing skills. My grammar was OK and I knew what paragraphs were, but I didn’t know how to write for an audience or build a story.
Investing time, effort and money into yourself will open doors or allow you take opportunities when they arise. Often coming with a pay rise or new source of income, this can be very rewarding when extrapolated over a career.
The Foolish bottom line
This has probably been one of the easiest (yet hardest) articles I’ve written for The Motley Fool. That’s because it has come from the heart, but is unfortunately my last, for now.
All the best on your journey to become smarter, happier, and richer.
Where to invest $1,000 right now
When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*
Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.
*Returns as of February 15th 2021
Motley Fool contributor Lloyd Prout has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.