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Check out Episode 016 in iTunes here!
If you are serious about investing for the long-term or about trading, this podcast is a must-listen.
Tom and I discuss the most important elements of investing: psychology and risk management.
Investment psychology continually tries to get in your way. We are not built, as humans, to be great traders. The best way to invest, in my opinion, is to have a complete system that helps you avoid going against your own psychology. We’ll talk more about this in Investing 101.
In This Podcast, You’ll Learn:
- The 3 ingredients to successful trading.
- Why you shouldn’t passively let your portfolio go.
- Why psychology is the most important element of investing success.
- How to think about investing.
- Why you need to remain even-keeled.
- Why good investing should be boring, and not sexy.
- What band-aiding the last loss is, and how you avoid a complicated trading strategy.
- How you can succeed and only be running a strategy that wins less than 30% of the time.
- Why a loss is only one step closer to your next winner, and how to accept losses.
- The tuition at the College of Trading.
- Why you should focus on process, not outcome.
- Why you need to read books that focus on the process.
- And much more!
Recommended Book:
- Trade Your Way to Financial Freedom by Van Tharp – per Tom, “the best book on trading.”
- The New Market Wizards – Tom is featured in this book.
Best Piece of Financial Advice:
- View people’s opinion and data to try and figure out whether it is a fact, or an opinion. This will save you so much in your investing career. You have to filter out things that are not facts.
Action In Next 7 Days:
- Pull out a sheet of paper and create a balance sheet for yourself. Keep a simple budget, and this will put you ahead of the vast majority. Look for more ways to put money into your portfolio and into your retirement. Look at what the rest of your life looks like, and decide if you need to change something. Then, you will arrive at your final destination, but not if you don’t take control of it now.
Connect with Tom:
- Book on Amazon: Panic-Proof Investing
Tom shares so much great insight, and if you take advice from anybody, it should be someone like him. He has nearly 50 years of experience and knows more than most anybody on the subject… yet, he says that he is still learning!
His recommended book, Trade Your Way to Financial Freedom covers the top 3 aspects of trading: 1) the buy/sell decision process, 2) position sizing and what instruments to trade, and 3) investment psychology.
These 3 aspects are so important, and they should be something understood by all that are investing. “You have to use investment psychology to control everything else. It is the most important part of all.”
Tom talked about, even after decades in the industry, he still has to focus on investing psychology. “On the good days, I try to remember the bad days. On bad days, I try to remember the good days. I’m constantly trying to bring myself back to even.” You want to remain even-keeled, and good systematic investing should be boring. It is very boring for me, so that is why I created YoPro Wealth to help supplement what I’m doing with my trading. I want to coach others on the wisdom I have learned over the years.
Action Items:
- If you’re interested in learning more about the stock market and investing, check out Investing 101 – a course to teach you the basics of investing so that you can build massive wealth.
- You’ve heard me say it before – you can’t fix what you don’t know. So, sit down and create a balance sheet for yourself. Figure out where your money is going, and find a way to invest more in yourself and in your retirement.
- Take responsibility of your financial future today. Nobody else will.
