11 Things Every Stock Market Investor Should Know💰
When a company grows, they make more money, which makes them more attractive to own. As a company’s earnings rise, more people want a piece of the action and the stock price increases. That’s how capitalist society works. And as long as we have that, stock prices will increase in the long run.
If you hear news about stocks or assets that shot up triple digits in a short amount of time, and your hands are itching from greed, just sit back. You’ve missed that train. Never trade something after it reaches the mainstream because it’s too late. The insiders got all the action.
Investing for the long term is not about reacting, it’s about sitting. You bet on growth and you wait.
In the short-term, stock prices behave irrationally. In the long term, they are surprisingly rational. If you worry about high valuations, and you want to avoid investing, remind yourself that things will even out in time. Keep investing and play the long game.
There are always winners, and there are also a lot of losers. Just because stocks move up in the long run, it doesn’t mean all stocks will go up. Some will collapse and never come back.
Scared money is the money you absolutely need to survive. That’s the amount of money you need to buy groceries and pay the mortgage. But most people look at all their money as scared money.
And once you put your money to work, you’ve got to be so optimistic that there’s not a single doubt in your mind that the global economy will keep growing. When you adopt that mindset, you get scared when you don’t invest.