Stock Investing – How Nervous Should I Be?

After a strong week on Wall Street that ended the month of October, 2008, the market´s turbulence is undeniable.  For much of 2008, massive losses have been followed by impressive recoveries.  News reports that trumpet the end of the stock market as we know it are quickly replaced by new articles proclaiming the resiliency that Wall Street has shown.  While the market has definitely declined during the year, the famous Mark Twain quote that ¨the report of my death was an exaggeration¨ can certainly be attributed to Wall Street as well.  With all that has occurred, doubts still remain.  Should I be scared about stock investing?  This is a question that occupies the minds of many investors today.  Contrary to what some might think, it is not all bad news for Wall Street.

Good News About Stock Investing

The truth is that diligent investors shouldn’t be scared about stock investing, even in these volatile times.  In reality, successful investors don’t pay close attention to the “gloom and doom” of Wall Street news.  Do they listen to it?  Of course they do.  Do they get emotionally involved in it?  No way.  Are you going to see Warren Buffett selling all of his stock tomorrow?  Not a chance.  The investors that find success on Wall Street don’t react to greed and fear.  For them, stock investing is a plan and successful investors stick to the plan.

I know you are saying that you aren´t exactly Warren Buffett; you don’t have billions of dollars to insulate you from quick changes when you are stock investing?  That’s ok; we’re going to talk about why you STILL shouldn’t be scared.  Even if you don´t have Buffett’s billions you do have many of the same trading and investing tools he has.  If you take away his corporate analysts, there are common factors that exist between you and him.  For example, consider this common ground:

  1. Access to Technical Analysis – Ok, he’s probably got a whole company that performs fundamental and technical analysis, but the activity is the same.  What do you know about the companies where you own stock?  If you are buying stock in a new company, can you write a justification for why you should buy it?  If you don’t have the answers it means you aren’t doing your research.  Performing research is easier than ever before and it is accessible to you before you start stock investing.

  2. A Stock Trading System –You may not know what method Buffett uses, but you know that his people chart stocks, analyze trends and look for signals; this is what a stock trading system is all about.  You have access to powerful systems of charting symbols and trends that help you see patterns in stock investing before they occur.

  3. A Stock Trading Plan – Regardless of its complexity, it is a given that Buffett has a trading plan.  When should he buy or sell?  What types of stocks does he need to balance his portfolio?  How does he minimize losses and maximize gains?  Stock investing for him or any other successful trader still includes a plan that outlines these things; yours should too.  Many of the ups and downs of stock investing are driven by people who don’t have a plan and get caught up in the emotion of the market.

You Also Have A Choice

Should you be fearful these days about stock investing?  If you are looking for ways to spot solid investments and minimize your risks, now can be a good time for stock investing.  Remember that the most successful investors are not pulling out of the market; in fact, Buffett is encouraging people to stay involved.  Stock investing is a discipline, not an emotion, and profits can be found even in uncertain times.

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