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Because even one of the greatest quarterbacks to ever play the game believes he still has work to do to get better.
“There’s no such thing as perfect. There’s only the relentless pursuit of perfection,” Brady said in 2021.
That key behind Brady’s success in football applies to everyone reading this right now.
There isn’t a nirvana investing level to achieve where your work just ends; success in investing and trading is a relentless pursuit.
Even some of the greatest investors, from Warren Buffet to Jim Chanos, keep learning and adapting.
And after studying these industry icons for years, I uncovered three simple ways to improve your investing:
- Journal and review your investments.
- Stay informed on what’s happening around the world.
- Select an appropriate strategy.
And whether you’re a veteran who has been buying and selling stocks for decades or someone who just placed their first options trade yesterday, anyone can use what I’m about to tell you to become a better investor and trader over time.
1. Journal and Review Your InvestmentsGrowing up, I used to think that you could overcome anything by sheer willpower. It was embedded into the ethos of America at the time.
I was surrounded by stories about hard-working people lifting themselves up by their bootstraps to achieve the American dream, beating any and all odds.
These stories are incomplete.
They aren’t about simply staring down obstacles and watching them crumble to dust.
They are about individuals seeing their potential limitations, acknowledging them, and working around them.
Polio limited bound Franklin Delano Roosevelt to using a wheelchair, but that didn’t stop him from leading a nation. Barbra Streisand suffered from overwhelming performance anxiety, yet she returned to the stage after a 27-year hiatus.
For traders and investors, the lesson is that we need to see and admit to our own obstacles and find ways around them.
Think you’re an ace at tech investing? Keep a trade journal and find out if there is anything holding you back from maximizing your moneymaking potential.
A friend of mine couldn’t get his account above $30,000 for the longest time even though he made some killer investments.
Turns out he made these little gambles for $50 to $100 that rarely worked out. And over time, they added up.
I know of many investors who feared jumping into the market after 2008 and missed a significant portion of the ensuing 10-year bull market.
An investment journal helps you create an honest, unbiased assessment of your performance.
Here’s a sample from a friend of mine who trades options.
In this example, the trader logs the ticker; the strikes for the options trade; the type of trade; the entry and exit prices; and, though not shown, the entry and exit dates as well.
Your investment journal doesn’t need to be as extensive. However, there are some basic components any good journal should include:
- Ticker symbol
- Entry and exit date
- Total shares or contracts
- Entry and exit price
- Simple notes
Not everyone includes notes, and it’s a shame. We can’t expect to remember every trade, let alone the nuances of each trade.
2. Stay Informed on What’s Happening Around the WorldThey say investing moves at the speed of information.
None of us can be expected to stay connected to our computers 24 hours a day or read every printed news summary of what’s happening in the world.
Luckily, you don’t have to. Investing today isn’t just about keeping up with the specific events; it’s about being aware of the trends that tie those events together.
For example, Russia’s invasion of Ukraine pushed oil and gas prices higher as supply shortages got even tighter.
Imagine the invasion occurred in 2019 instead of 2022. Would oil and gas prices have budged?
Probably not, considering the glut of inventory and pace of production at the time.
What makes energy prices so bullish right now is the combination of current events and broader trends.
That’s a big reason I discuss broader movements and undercurrents in the financial world and society, such as the Internet of Things (IoT), green energy, or machine learning.
As investors, we need to identify and learn about as many of these themes as possible.
Not all investing themes will amount to large profit opportunities; some may amount to nothing at all.
But being aware of different developing themes gives us the framework to analyze the news and find ways to be ahead of everyone else in our long-term investments and trades.
3. Select an Appropriate StrategyI’m sorry to say that there is no magic indicator you can drop onto a chart that will automatically improve your results. (If you do find one, let me know.)
The few times I thought I found my golden ticket, it only lasted for a few months.
Buffett knows that his edge lies in tangible, simple business models, companies like Coca-Cola (KO), Geico (BRK.A), Chevron (CVX), and Bank of America (BAC). Most software and technology firms don’t hold his interest.
Each of us has a tendency or comfort zone in trading and investing. You might be an awesome day trader or love options. Maybe you kill it with momentum stocks or small caps.
There are as many ways to profit from investing as there are stars in the sky.
As I alluded to in the first section, don’t try to be something or someone you’re not.
If you have a full-time job, it’s not realistic to expect day trading to work out for you. If you’re near retirement, don’t take on risky investments that could decimate the portfolio it took you decades to build. Ultimately, the strategy you select needs to:
- Fit your lifestyle
- Keep your interest
- Work with your goals
You don’t have to do it this very second, but I encourage everyone to carve out some time and take a hard look at themselves as investors and traders.
It can be tough, but just like Tom Brady when he hears his alarm clock go off at 5:30 a.m., you just have to remember that the work you put in will make you better than you were the day before.
What does your self-assessment say?
Email me and let me know. I’d love to hear your results and what you plan to do with them to improve your performance.