The Secret to Investing Success
It's probably not what you think.
And yes - it does feel like I've been a Minyan forever. I think I'll always feel like a student of the market -- starting my fifteenth year in full-time trading -- and certainly not a professor!
Today, I want to share what I believe is an essential trait that successful investors and traders share; the one single component that makes them victorious in their pursuit of profitability. I don't think we can bestow that honor to stock-picking skills or account size, or
even the numbers of years spent behind trading platforms. Just like in any other endeavor, it isn't the enthusiastic start or the expensive gadgets that determine the outcome. The secret of success in investing, I believe, lies in learning from your trading mistakes and failures.
To most, this might seem an incongruous thought. Some think that always being right is the key determinant of success. And yet others are led to believe that their failures stem from not having the cutting-edge stock-picking technology. But think about it: Avoiding failure is an option investors and traders don't have. After all, they're dealing with constantly moving targets and too many unknowns, and they'll encounter failure very early on. But more often than not, they'll blame the markets or a vague entity referred to as "them."
"The real difference between people who pull themselves out somehow versus the people who do not, says Susan Nolen-Hoeksema, a psychologist at Yale, is that some slip into 'rumination' - a spiral of morbid self-involvement that's extremely difficult to shake. But what
separates the ruminators from the resilients? Why is it that the same set of circumstances that drives one person deeper into the mud makes another stronger….? How can we learn, as Samuel Beckett put it, to 'fail better'?
" 'Failing better' boils down to 3 things. It's a matter of controlling our emotions, adjusting our thinking, and recalibrating our beliefs about ourselves and what we can do in the world."
I highly recommend this article on failure in Psychology Today.
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