How to Learn Investing For New Investors
Are you at the beginning of your journey to learn investing? This article is for you! Be sure to bookmark this page so you can refer to it later.
The biggest struggle for people who are brand new to investing is to know where to start, what progression to follow, and who to trust. If you are looking for an efficient sequence that you can follow with recommended reading / materials, that is exactly what this page is all about.
Here are the five overall phases that I recommend beginners focus on with they are learning to invest, and specifically in this sequence.
1. Learn how to value a business
The truth about investing is that the people who do well over time by investing in public markets have learned how to value a business so well that they can spot bargains in the market. There is no substitute for learning how to value a business. You must go through the learning process and build an expertise in this stage or all the other stages are of no use.
2. Develop expertise in Idea Generation
Now that you know how to value a business, your next step is to become very efficient at finding ideas to analyze. We call this phase Idea Generation and if you can get really good at this, you will have an endless supply of ideas to analyze.
3. Develop an Idea Management System
There is so little information about how to move an investment idea from the new idea stage to the final decision stage. Developing a system to track and move your ideas along a path to a final decision is an absolute necessity that almost all investors overlook.
4. Design a Portfolio Management Plan
Once you have ideas that have been fully analyzed and vetted in the Idea Management System, your next stage is Portfolio Management. This stage is all about opportunity cost, position sizing, analyzing correlations, buying plans, and sell disciplines.
5. Become a better investor by tracking your investment returns
A key to constant improvement as an investor is to design and implement feedback loops so you can capture experience with winners and losers. Analyze what went wrong with losers and what went right with winners.
Be sure to bookmark this page and come back to it often. It is a portal into the world of learning about investing. Good luck, and be sure to contact me if you have any questions!
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