Having the Right Mindset to Invest

My blog just reached 3 months old, can't believe it's been so long since I've started blogging. 87 published posts as well, I feel like this is a good way for me to store my own thoughts for future reference as well, while being able to get comments and feedback from readers through comments and emails, thank you for supporting this blog. Anyway, back to the post.......

Yes, I agree that investing is able to help us achieve good returns on our invested capital in the long run, which many investment bloggers (including myself) point to encourage people to invest. And it's also true that investing gives us good opportunities to have a share in the growth of the companies that we have selected and when selected well can generate amazing returns that can far outweigh those that we can get from a standard bank fixed deposit. But I don't think that we should just keep on investing our money just for the sake of keeping ourselves vested (for whatever reasons we may have) and should instead ensure that we have to right mindset and idea about investing before we even start a new investment.

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Investing with an eye on the stock ticker and thinking of it an exciting side hobby like gambling is not only a completely wrong idea about investing, but can also lead to tremendous losses. The good returns from investing only apply to those that sit on their investments over long periods of time and buy during the dips, not as the market reaches to its ever-higher peak. I'll quote Paul Samuelson on this "Investing should be more like watching paint dry or watching grass grow. If you want excitement, take $800 and go to Las Vegas."

Sometimes I think it's the nature of some people that make them more likely to speculate than to invest. I find impatience to be the one that encourages one to start speculating and trying to get spectacular returns in the short term by guessing the next moves of the market. If we are going to invest, we must be prepared to be patient and wait for our investments to bear fruit in the long run, if not we may be better off just putting our money into a fixed deposit and continuing to save towards our goals. 

Investing doesn't just involve our money, it also takes an investment of time to study the different types of investments, companies to make informed decisions on what we should be investing in. Unless we are willing to make at least a small investment of time before starting to invest, we are likely to suffer a lot of avoidable losses.

We definitely should not invest simply because it's the cool thing to do. Usually investing at a time when it is popular is not a good sign, as it's a time when the market has had an extended bull run and may have a major correction. Investing is not something that we should just be doing for the short-term while it is the "in" thing but is a long-term process that can span many years, or Warren Buffett's favourite holding period, forever.

With the right mindset of investing, with a focus on the value of the companies that we invest in and not being swayed by all of the noise present in the market on a day-to-day basis, we are able to generate long-term rewards for ourselves. But don't be swayed into investing simply by the high returns brought about by the stock market in the past or other people telling you to invest, you need to be prepared to make that leap into investing yourself and not just investing for the sake of investing (sometimes it's better to keep cash too anyway)

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