Invest in Your Investment Skills for Your Future: 6 Beginner Tips

There’s a classic saying that you should sharpen your axe before you run into the woods. While this is very useful advice, it doesn’t really apply to investing.

If you want to be a successful investor, you need to walk into the forest (no need to run) and sharpen your axe at the same time. If you sharpen your axe for a long time and then go into the forest, you will find many trees that have been cut down before you.

So, you need to start investing now, but you also need to sharpen your axe the rest of the time so that you can manage it better and see opportunities earlier.

If you know how to swing an axe, go cut some wood. Read on to find out what you can do the rest of the time to sharpen your axe…

Read (or listen to) books

Somewhere in the book Reminiscences of a Stock Operator (Edwin Lefèvre), written 100 years ago, it says that the price usually oscillates between two price ranges and that the right time to invest is when the price breaks out of that range. These are nothing more than the support and resistance levels that we now talk about in technical analysis.

So, what I’m saying is that these old financial books are by no means obsolete, and you can learn a lot from them. And I don’t think the way the stock market works is going to change until people’s psychology about finance changes.

For example, The Intelligent Investor (Benjamin Graham) is a legendary book, but I don’t recommend starting with it, it’s like the Origin of Species, it’s revolutionary, but it’s unthinkable to make a movie out of it. I suggest you start with a relatively light but high-quality book like The Psychology of Money (Morgan Housel). I can also recommend One Up On Wall Street (Peter Lynch).

Reading these books, underlining and taking notes will be extremely helpful, but the audio book option can also be very effective. For example, last month I listened to 4 books on my way to and from work and I find this a very efficient method, I highly recommend it.

Take a course

I’m not telling you to pay for a course. Don’t. Instead, you can find free courses on platforms like Coursera, Edx, or Khan Academy. If you want a certificate on these platforms, you’ll have to pay for the course, but if you’re not going to be a financial advisor, you don’t need these certificates.

Find a course with the information you need, follow the lessons, and move on to the next course. The important thing is to gain valuable knowledge, not to show off your certificate. If the certificate will give you a return in the future, get it, but if it is just sitting in the corner, it is an inefficient investment.

Try to buy the highest quality assets at the lowest price, that’s the investor mindset. If you can apply that to every part of your life, you can make much more efficient decisions.

Follow investment experts

You don’t have to read and analyze all the news to understand the market. Sites like Seeking Alpha and Morningstar offer in-depth research, market commentary, and investment ideas. By subscribing to these sources, you can stay on top of market developments and expert opinions.

By cross-referencing the information you get from these sources, you can make investments that work for you, or recognize when it’s time to stay away.

Similarly, following the social media accounts of individual investors or experts can also give you an edge.

Join investment-related groups

Talking and even meeting with people who have the same goals as you will motivate you and provide an important exchange of information.

For example, you can join a Reddit group about investing. You can find many forums or Discord groups that can benefit you. You can learn a lot in these groups, but at the same time, talking to people who are in a similar position to what you are doing can give you extra motivation.

If possible, go to panels or investment-related events. Being physically present will increase the impact. You will have a more concrete understanding of your goals and what you have accomplished, believe me.

Use simulation programs

At the beginning of the article, I said go straight into the jungle, and simulation is actually the opposite of that, but the way you use it is a little different than you might think.

If you’re going to act like a trader, it makes sense to learn through simulation, but if you’re going to be an investor, you can just start buying. Still, simulations can be useful.

Let’s say you see a correlation between some stocks and some market data, and you can predict what’s going to go up based on that. But no one has written it down, and you’re not sure it will work. You can use a simulation to find out how profitable or unprofitable your theory is. So, you can use the simulation to validate your own ideas. You may come up with a tactic that you can use in the future.

In addition to coming up with investment ideas and picking stocks, you also have to work on how to execute them. Making it more efficient is as important as sharpening the axe and choosing the right tree.

Make an investment plan and set goals

This may sound like a cliché, but a lot of people don’t realize how important this is, so they don’t make a detailed plan.

Think of it this way: if you get a gym membership, you might skip or quit at some point (we’ve all done it, be honest). But if you make a long-term exercise plan, and even a nutrition plan, you are much more likely to stick with it.

A financial plan works the same way; if you throw money at something every now and then, you won’t accumulate much wealth. To get started, you can do the following

• Determine how much you will invest each month; this can be a fixed amount or a fixed rate.
• See how much you can increase this amount each year. Increase the amount you invest each year.
• Calculate approximately how much you can invest each year.
• Set goals for your savings in 5, 10, 15 years.

Planning has a direct impact on how your investments will return to you in the future. In addition, setting goals will help you achieve your future life within the timeframe you have planned. If you fall behind, consider investing more.

Achieving your goals ahead of time will help you achieve the life you want sooner. The better you plan your rich or comfortable life, the sooner it will become a reality.

You can invest steadily in funds without any of this and still achieve your goal. There’s nothing wrong with that, but it’s not too much of a risk to adopt a slightly more aggressive investment strategy to reach your goal, say, 5 years earlier. Especially if you are still relatively young.

Investing in your investing skills is an ongoing endeavor. If you want your money to work for you consistently, you need to guide it from time to time and keep an eye on the road. If you keep up with what’s going on in the world and in the market, and if you make a habit of improving your investing skills, you’ll get there a lot faster.