One of the best things about investing is that it is possible for everyone to succeed—no matter your age, income, gender or IQ.
As a beginner investor, it’s easier to avoid mistakes and decrease risk by investing in companies you are already familiar with, and that have meaning to you.
For example, if you work in the tech industry, it’s going to be much easier for you to understand the goals of a tech company as well as their potential to reach those goals than it is going to be for you to evaluate a company in the pharmaceutical industry.
Consider your personal passions, talents, and spending habits. Better yet, map them out using a venn diagram, placing passions in one circle, talents in another, and spending habits in another.
Where these three areas overlap is your “Circle of Competence”, reflecting the industries and sectors you have the most knowledge of and where you should start your search for companies to invest in.
Over time, you can begin to research companies across various sectors and expand your knowledge-base and comfort zone, but investing within your Circle of Competence is the best place to start.
As you embark on your investing journey, remember to stay rational, mindful, and disciplined. It is the only way you will be successful in value investing.
In today’s podcast, Phil and Danielle discuss value investing in 2021, and best practices for investors of all levels to be successful in the stock market.
Ensure you always make smart investment decisions with my 3 Circles Exercise Guide. Click here to get started: http://bit.ly/3ozYpkJ
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