Try writing your investing strategy down using ONLY a few sentences. Can you do it?
I believe in the rise of the do-it-yourself investor. I think it’s in its early stages, and is setting up for something massive. The barriers are falling down all around us. There’s nothing preventing anyone with any amount of money to getting access to capital markets, and learning about them. It’s never in history been this easy.
But every DIY investor is going to experience some hardships, and some lessons along the way. Stocks, crypto, what have you. There are a lot of smart people sitting at the investing poker table. They have more powerful machines, they have bigger teams, they have more money, and most of them have more experience.
I’ve been in markets for several years, and only now do I feel like I understand my strategy, and what I’m striving to do. I can write my plan out in a few sentences. I could explain it to a 5th grader. That’s the true test. That’s step one. I recently wrote these four sentences down:
I believe your best investing starts when you decide to only buy companies with management you believe in, a product you’ve enjoyed, and financial income to support their future vision. No matter the outcome, if you can check the boxes on those three things, you will rest like Sloth Kong napping in the trees of Costa Rica. Most people don’t learn that for years, however. They lose money buying the wrong stocks based on hype, tips, headlines, and lack of do-it-yourself research.
There’s no easy path to earning a seat at the investing poker table. The saying really is true. How does it go again? If you look around and you’re not sure who the patsy is, you’re probably the patsy. You may not realize it now. But at some point, when the trend changes dramatically, and it will change, there’s a lesson to be learned about just how little you knew.
If you’re just getting started, what you write today will not be the same as what you write five years from now. It is a start, though. That’s important. You can take this strategy to the poker table. You can make controlled bets based on it, and you can learn about what’s working, what isn’t, and where you want to be sitting in the future. You’re putting yourself in a position to evolve, and evolution is literally life.
“If you always put limit on everything you do, physical or anything else. It will spread into your work and into your life. There are no limits. There are only plateaus, and you must not stay there, you must go beyond them.” — Bruce Lee
I uses these posts to evolve my own thought process. I’m writing it down, and holding myself to a standard that’s open to the entire Internet. I would encourage everyone to do the same. Or at least try it once. I think if you want to be great at anything, and especially at managing your own portfolio, you need to put yourself through a process of growth. It all starts with defining your strategy in the simplest possible way so even a 5th grader could understand it.
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The First Step To Becoming a Do-It-Yourself Investor, and What I’ve Learned was originally published in Luchini In The Air on Medium, where people are continuing the conversation by highlighting and responding to this story.