Can You Invest on Your Own?
Yes you can invest on your own and be very successful at it. You don’t need to rely on financial planners, mutual fund sales people, or investment advisors.
Investing isn’t rocket science and you certainly don’t need a degree in finance or economics. My approach to investing is simple, buy stocks in quality companies when they are undervalued. By quality I mean companies that:
- Are financially healthy
- Have low debt
- Have very little competitors
- Are virtual monopolies in their field
- Are consistently profitable
- Pay increasing dividends year after year after year
Undervalued companies are companies whose stock prices are at historically low levels. Remember you want to buy low and sell high, that is when you are going to maximize your profits.
You can invest on your own and you don’t have to spend hours and hours of research to be successful. There is a misconception that states the more time you spend on your investments the higher the returns you will get and that is certainly not true. The amount of time you spend on stocks has to be quality time and not a waste of time chasing the latest investment fad.
You also have to have the patience and discipline. You need the patience to ride out market downturns when they occur (and they always do), and have the discipline to stick to one strategy (hopefully the strategy I talk about on my website and blog).
You can invest on your own and be very successful, but you don’t have to take my word for it:
“First of all, don’t complicate things with a lot of variables that you will have to keep track of. Keep it simple. Avoid frequent trading, develop long-term rather than short-term policies, don’t try to guess the length of cycles, and forget strategies that require a lot of knowledge or constant research. And don’t get led astray. There are siren songs all around you: All kinds of intermediaries will want you to part with your money. Don’t be sold, be a buyer. The game I suggest is not very complicated and it works. ‘You can paddle your own canoe’ with great confidence.”*
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*Page 111, “The Investment Zoo”, by Stephen A. Jarislowsky