Fri 6 Oct 2006
Education, Education, Education
Real Estate is all about location, location, location. But online investing is all about the three E’s: education, education, education.
If you want to take the leap and become a self sufficient online investor you have to be prepared to put some time into educating yourself.
Important things in the self education program:
- Learn what you are investing in.
- Be in control and take decisions: when it comes down to it you are on your own. There is no fund manager to blame. But this is also good since it most likely will sharpen the senses.
- Learn to see through the information overload noise: There will be plenty of recommendations and “tools” to help you. These tools rarely gives you any insight. As said in the two points above, educate yourself about what you are investing in and then make a decision for yourself, don’t let some “tool” do the decision.
- Filter out the bad sources of information. Often online chat rooms are very biased one way or the other.
- Invest, not trade. Even if it is cheap to trade, taxes and transaction cost will eat into the profit. It is most likely not possible to make money in the long term by rapid buying and selling. Even if a lucky gamble may work sometimes. 50/50 % chance + commission and taxes. That’s basically blackjack.
- Learn to not check stock quotes daily, even if it is online and available.