How to avoid one of the cardinal sins of the individual investor

by , 23 October 2017
How to avoid one of the cardinal sins of the individual investor
Have you ever heard of overtrading?

Overtrading is when an investor jumps from one stock to the next trying to make as much profit as possible.

The thing is, overtrading can damage your portfolio.

Why?

You are trying to time minor daily fluctuations that are harder to read than long-term trends. And the more you do this, the more you're likely to bank losers.

So how do you avoid overtrading?

 
 
Avoid overtrading by being…
 
In his 1991 letter to shareholders, Warren Buffett noted, "Our stay-put behaviour reflects our view that the stock market serves as a relocation centre at which money is moved from the active to the patient."
 
More than 25 years later, that's still true.
 
Investors need more patience... And patience is exactly what Real Wealth helps to achieve.
 
It's only through patience and "doing less" that investors can hope to tip the scales of profitability in their favour by putting the weights on the side of their winners rather than on the side of their losers. 
 
 
  
 
Patience leads to profits. Do less. You're likely to make a lot more
 
Since 2010, Real Wealth has outperformed the JSE All Share by a mile!
 
Over the last seven years, we’ve closed out 42 stocks in total – 31 winners and 11 losers – that’s around a 74%-win rate, which is not too bad.
 
The average return per stock is 27.93%. If you include all the dividends we’ve received over the same time, the average return per stock increases to 36.57%.
 
To put it in perspective…
 
Using the closed stocks return (without dividend growth): A R500 monthly investment over the last 7 years could have turned into R235,535.
 
The same amount invested in the JSE could’ve turned into R95,194. That’s a massive difference of R140,341!
 
My point is, the secret to making money from the stock market and growing your wealth is to stay patient and invest for the long-term. 
 
Always remember, knowledge brings you wealth,
Joshua Benton, Real Wealth
 
P.S. Although patience is key component to making profits, the REAL secret to Real Wealth’s market-beating success is this…
 

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