Discipline is one of these assets that are normally undervalued. It is not sexy to be disciplined, yet in finance (and in management) discipline delivers you success.
You can check your disciplinary approach to investment by answering the following question:
It has become a bear-market recently. This quarter has been very bad. What have you done in this quarter? Please select of of the two options:
- I have invested with the same frequency as in the bull market. More or less the same amount of orders and transactions.
- I have been less active recently. I’m waiting for better opportunities.
It is well known that people are less active in a bear-market than in a bull market, yet it should be your target to break through this pattern. Investment opportunities are always present, for both following a technical or a more fundamental approach.
More important is that you know have active you want to be with your portfolio. You should balance this. You cannot time the market, you cannot predict bear- or bull markets, the only way to get the return you deserve is to know what your financial preferences are and that you follow these.
Of course it is tempting to speculate and to win a few ones, but if there was such a magic formula, it would be available on the market. Try to learn more from the professionals - read some more about Peter Lynch for example - and invest with discipline.
© 2005 Hans Bool
Hans Bool is the founder of Astor White a traditional management consulting company that offers online management advice. Astor Online solves issues in hours what normally would take days. You can apply for a free demo account