Acheiving Competency in Investing (and maybe, trading)

How can one acheive competency in investing?
1) Read
2) Think
3) Practice
4) Repeat 1), 2) and 3) every week, every month, every quarter and every year

The above four steps, in my personal view, are the basic steps to acheive competence. This is also what I have been doing for the past few years to improve my investing skills.

While it is amazing how much I can learn by doing the four steps, I am amazed by the commitment one needs to do the four steps. You can always try out these steps and see if I am lying on the commitment required.

To get you started in step 1), I shall list down a few books that are important, regardless of whether one is an investor or a trader. Just ignore the titles and read them.
1) The Winning Investment Habits of Warren Buffett & George Soros by Mark Tier
http://marktier.com/Main/index.php
2) Trade Your Way To Financial Freedom by Van K. Tharp
3) Way of the Turtle by Chris Faith
http://www.wayoftheturtle.com/2007/03/22/the-four-maxims-of-trading/
4) Enhancing Trader Performance by Brett Steenbarger
http://www.brettsteenbarger.com/

Read the above books for the psychology of being a trader or investor. From my personal experience, the psychology is always the hardest part in investing. Unless you are lucky to have a brain suitable for investing, you will find that the other aspects of investing are not as important as the psychology.

Comments

donmihaihai said…
Hi Thinknotleft,

I am glad that I am not alone in this little red dot.
ThinkNotLeft said…
Hi Donmihaihai,

you're welcome. However, I may have a part two to this post. I realize that my three steps may be too restrictive.

For example, the idea is not to read but rather to get exposure to ideas. One can skip the reading, just do testing or real-time trading and use the test/trading results as inference to gain competency.

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