If you want to make serious money in this world, you have to take ownership of capital – or in old-fashioned language, the means of production.
When you do, you’re faced with a choice. You can either leave your money in a diversified portfolio and wait for the economic tide to deliver returns. Or you can go into the hectic world of trading and try your hand at timing the market.
Academic economists strongly recommend that you don’t do that. They point out that beating the market consistently is probably impossible. Any wins you do have are mostly the result of blind luck, not foresight or skills.
But other people would disagree. You can indeed make the right calls, so long as you have a system.
You have other options, of course. Visio Lending offers a great commercial broker program where you can effectively earn commission on loans, but avoid the risk. And you can choose to buy gold and play the long game. (Whether it will ever pay off or not, though remains to be seen).
The financial sector is competitive and daunting. Here are some of the life lessons you learn when you step out and take risks.
Only You Are Responsible For The Results.
If you think you can rely on somebody else to make decisions for you, you’re sadly mistaken. Taking financial risks is an activity that rests squarely on your shoulders. If you’re wrong, you have to take the pain – nobody else. If you’re right, you win big and enjoy the proceeds. It is that simple.
You Learn To Ignore The Media.
If the media knew how to trade, their pundits would be millionaires. The news has to prognosticate to get ratings, but they often have no idea what they’re talking about. Studies show they’re right just as often as they’re wrong, meaning you can’t rely on them.
The only way to trade is to listen to your reasoning. You’re just as much a participant of the market as anyone else. So you’re in an excellent position to judge whether you think financial securities are priced correctly or not.
Ignore Missed Opportunities.
Opportunities come and go all the time in financial markets. If you missed a big one to make money, don’t worry. Even top investors don’t get all their calls right. Instead, they come up with a winning strategy that works over the long-term. You can do it too.
Stop Trying To Be “Right”.
Of course, when you invest your capital, you want to be right more often than you’re wrong. But never hold onto your pet theories as if they’re sacrosanct. Nobody understands the economy. It’s too complicated, and it depends on the opinions of market participants, which are practically impossible to predict. You should never assume that you have all the answers. Instead, you should keep listening to the voices around and make calculated decisions based on brute facts. Always check your logic and never just take a punt in the dark.