What are the things that girls like about guys that qualify them to be their partner?
In this article, I aim to share with the audience the fact that there is some similarity in how you pick your partner and how you should pick your stocks.
Different girls have different criteria– I am no love guru– but my suggestion is that:
1) They should know that beauty is only skin deep—and focus on what matters—which is the character of the person– and whether both their life values are aligned
More often than not, the more fancy-looking stocks are the bad one; take a look at GoPro Inc (NASDAQ: GPRO) back on October 3, 2014, when it was trading at $86.97—during the point where Go Pro was the “in-thing” with all my friends. Look at where it is today, as of 26 July 2016 GoPro is trading at $11.33—an 86.9% drop!!
In picking stocks, it is important to pick the type of stocks that matches your investment goal– and your investment goal should not be based on your feelings– it should be based on understanding the business behind the stock ticker.
Of course, a lot depends on your risk tolerance, age and also commitments in life such as requirements to pay for your child’s education etc.
For example, generally when one is still young, they would be able to take on more risks—and they can choose more growth stocks. But, when one is older, they might not want to take too much risk—so they can choose more stable dividend paying stocks for retirement purpose instead of growth stocks.
2) Know that things are never certain but we know that we need to have faith in them– when we made the decision to choose that partner
Once you have done your analysis on the stocks and it matches your investment goal, you decided to buy it. After some time, the price of the stock fell 30% from your buying price. Do you sell it?
The answer is that it depends– you will need to check if the company has changed from the time you bought it and whether reasons of why you bought the stock in the first place is still valid or not. If it is still valid, have faith in them and hold on.
3) Know that picking your partner is a combination of an art and a science
We can do all our analysis using fundamental or even technical analysis. Yet, at the end of the day, not every factor that affects the stock price is quantifiable—a perfect example is the components of human behaviour embedded in the stock price.
For example, recently Pokemon Go became a huge hit and investors started buying Nintendo shares—which resulted in it doubling in value within a short period of time. However, little did they know that the success of Pokemon Go does little to Nintendo’s net profit.
That is why, when Nintendo representative confirmed that Pokemon Go does little to their net profit, the stock price went back down.
If you agree with the above 3 criteria, I am sure you would also agree that you should pick stocks like how you would pick your partner—as the decisions we make can make or break our life—or our bank account!
There is one difference that I can think of: Unlike investing in stocks whereby we can diversify our risks and have multiple stocks and sell them when things gone bad, in choosing a partner we cannot.
We choose one, commit to one, and invest in only one. And that one partner we chose will make all the difference to our life.Recommend0 recommendationsPublished in