Learning how to invest is not just about buying and selling stocks. On my website, I mention several times that investing is an entire process, with trading (i.e. buying and selling) just one small piece.
To that end, I laid out a potential process for you. From stabilizing your personal financial situation, all the way to make adjustments. And it is that last step (making adjustments) that is the hardest for most investors.
Why? Aside from the fact that most people don’t follow a process, making adjustments means that you made some mistakes.
That is why I love the following article (and others just like it). The author (Peter Brandt) does a great job of asking and answering questions in an attempt to evaluate his investing/trading performance.
1. Has my trading plan/guidelines/rules been out of synch with the markets?
2. Has the basic behavior of the markets changed?
3. Has my trading execution been out of synch with the plan?
Personally, I would not ask the same questions as Mr. Brandt (I am not too interested in the why behind market shift – only that they are shifting). Nevertheless, the exercise is still valid, and one that all of us should do more often.
How to Start Investing Safely