Little Acorns Can Grow Into Giant Oaks Comments24 Comments

The following is a guest post. If interested in submitting a guest post, please read my
guest posting policy and then contact me.

The stock market is not for stupid people who blindly follow what others do. It is not for chickens but for honey badgers. It is not for those who go with the flow but those who dare to buy when everyone is selling and dare to sell when everyone is buying.

In my past article, It’s Raining Rejections my dream of becoming a stocks trading superhero was nipped in the bud. My application to open a trading account was rejected and I was not given the chance to even get started with my trading career. I have never traded stocks in my entire life but I know I will succeed in the stock market for the following two reasons:

1. I do not do anything unless I know what I am doing.
2. I hunger to become a winning investor.

The problem with some people trading stocks is they don’t have any idea on what they are doing. Some buy stocks based on how popular the stocks are; they confuse trading with elections. Some buy and sell stocks based on what their favorite TV personality told them to do; they confuse trading with religion. Some people who trade stocks stubbornly hold onto their losses while their losses are small. Because they are emotionally involved with their trading, they continue to hold onto their losses until their losses get bigger and cost them a lot. They confuse trading with divorce. The stock market is not the lottery where you choose a random number and expect to win millions. You need to put in hard work and that hard work includes learning all you can about the stock market. Read books, attend seminars and learn about the concepts, principles and theories the stock market is built on. Learning those concepts, principles and theories is good for your brain and eventually will be good for your pocket, too. By learning, it is only then you are able to make informed and intelligent decisions essential to success in trading.

Stocks trading is risk-laden. Knowing what you are doing is important and certainly helpful but it will not guarantee your success. Even the most successful stocks investors suffered staggering losses in their trading careers one time or another. There is an inherent risk in trading that you just cannot eliminate no matter how knowledgeable you are because if you can, then you should probably change your name to Prophet. That inherent risk is the reason why it is equally important to hunger becoming a winning investor. It is inevitable that you will suffer losses in your trading career but if you hunger to become a winning investor you will always find courage and positivism to continue trading. You will not ever give up. Your persistence, hard work and determination to succeed will be the most important element in your success and indeed, eventually you shall see that little acorns can do grow into giant oaks.

Author Bio: This article is a silent witness to the awesome writing talent (or lack of it) of Arnel Ariate, author of Money Soldiers. He puts crazy in finance to make it fun. Please visit his blog at http://moneysoldiers.com and be amused, entertained and enriched.

If you enjoyed this post, please consider subscribing to the RSS feed or you are welcome to leave a comment below.
By : Adam | 2 Jan 2013
Tweet this article :
Div line

24 thoughts on “Little Acorns Can Grow Into Giant Oaks

  1. John S @ Frugal Rules

    Good post. Keeping your emotion at bay and being knowledgeable are keys to being successful. You’ll always have some sort of losses, even the best investors do. I like to have an investment plan that helps me measure my decisions against and keep a level head.

    Reply
    1. Arnel Ariate

      That kind of investment plan is a very good idea. If you could measure your decisions versus results in an objective way, that could lessen your decisions being clouded by your emotions.

      Reply
  2. Grayson @ Debt Roundup

    stocks are something that I want to get into this year. Since I tend not to jump into something that I know nothing about, I will take my time and learn about trading before I lose my shirt by trial and error.

    Reply
    1. Carla

      Might I suggest a great canadian author by the name of Derek Foster. His 6 books are all written in simple English, so that the regular folks can take advantage of the opportunities in the stock market. God bless your persistence and determination.
      By the way, why did your trading application get denied? Were you trying to trade on margin? In canada, there are options to open a discount brokerage account with no fees and no money up front, without margin. Debt free is a worthy lifestyle, especially in the world of the stock market which tempts many vulnerable people into acquiring debt.

      Reply
    1. Arnel Ariate

      Hi, Edward. Let met just say this: I like your last name. I think it’s catchy and memorable and it’s like a hi-tech, super cool rocket vehicle that everyone wants to ride.

      Stocks, indeed is a lot of hard work. I think one of the reasons why people lose money in it is some are too lazy to do the hard work. Good for you, with the mutual fund. I wish I know something about mutual funds like you do.

      Reply
  3. Sean @ One Smart Dollar

    I completely agree with you. I have heard people talk about investing in a company because they like using it. You need to be able to take the time to actually dig into the companies financials in order to see if there is value. If you don’t have the time consider mutual funds.

    Reply
  4. The Happy Homeowner

    Great post! Couldn’t agree more about knowing what you’re doing prior to making large decisions such as whether or not to invest in stocks. It’s usually shocking to see those who don’t do this and then wonder why they lost so much money, etc.

    Reply
  5. Jason @ WorkSaveLive

    Well-written post, Arnel. I’m certainly not interested in trading stocks because I prefer the long-term approach as I believe in Free Markets as a whole. With that said, it does take a lot of knowledge and education to be a successful investor…and while it’s likely that you will have major losses, it is possible to succeed if you educate yourself enough and not fall for gimmicks.

    Reply
    1. Arnel Ariate

      Thank you, Jason for appreciating my writing. I think having different kinds of investment is an excellent idea. I’d like to learn more about the other long-term approach investment that you have.

      Reply
  6. John

    I always enjoy a good post on stock trading. I did it for a couple years and one of the first books I read talked about how importantit is to leave emotion out of it. Buy when everyone sells and sell when everyone buys.

    “Some buy stocks based on how popular the stocks are; they confuse trading with elections.” Well put!!!

    Reply
    1. Arnel Ariate

      Hi, John. I think there is a lot of good wisdom in “Buy when everyone sells and sell when everyone buys.”. It’s not just about wanting to be different or being rebellious (did I spell that right?). It is actually about understanding how the market moves. I believe the market moves based on the law of supply and demand and when taken in that context, the sentence: “Buy when everyone sells and sell when everyone buys.” makes sense.

      Reply
  7. Ornella @ Moneylicious

    People who tend to hold on to their losses are emotional investors. They are hoping the market will come back up. It’s an interesting thing when it happens. Some investors are holding on to losses because they don’t want to lose their money in the hopes the market reverts back. Sometimes you have to cut your “losing” investments.

    Reply
    1. Arnel Ariate

      I agree with enthusiasm on that. It is wise to cut your losses while your losses are still small. I think it is important that you set objective rules so that you lessen the chances of your emotions getting in the way. For example, you sell stocks with losses of 10% of the original price.

      Reply
  8. Arnel Ariate

    Hi, Modest Money readers. I was not able to reply to your comments right away because I live on the other side of the earth from where you do where people are sleeping when you’re not and vice versa. Be assured that your comments are never ignored. Happy New Year. :)

    Reply
  9. Alex

    Persistence and patience are always good tactics when investing. I imagine that the flighty and fearful make up a disproportional share of trading losses.

    Good luck in your research about the stock market!

    Reply
  10. Aram Durphy

    Having a disciplined long-term plan is the key to maximizing your stock returns. Learn about how to read financials. Make sure you use diversity. Don’t let emotions dictate your trades. Look for value. Those are the basics to beating the market.

    Reply
  11. Arnel Ariate

    Good advice, Aram. I especially like the “learn about how to read financials”. It always fascinated me how the behavior of the market is influenced by a lot of factors and I enjoy learning about them.

    Reply
  12. Aspiring Blogger

    Great post, Arnel! I made an investing mistake in 2011 when I thought a company was severely undervalued so I bought a few shares. Well, a couple of months later they filed for bankruptcy…whoops!!! I sold immediately, but still lost most of my investment – oh well, it happens! Keep up the great work!
    AB

    Reply
    1. Arnel Ariate

      Hi, AB. That was quite funny, the bankruptcy part. That is why it is very difficult to trade stocks, you just never know what will happen. I think no one can really know for sure how the market will behave, or a particular stock. There are just too many factors to consider and these factors make trading complex. I think experience will help a lot in increasing your odds of success.

      Reply

Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>