How to Invest in ETFs Like a Master
November 23rd 2009 at 1:00pm by Tom Lydon
What do Warren Buffett, Tiger Woods, and Kelly Slater all have in common? They are masters of what they do, whether it’s investing, golf or surfing. By learning from them and mimicking the behaviors that got them to be where they are, you can become successful at trading exchange traded funds (ETFs).
There are lessons to be learned from those who have mastered a craft. While odds are good that you will never become Woods, Slater or Buffett, you don’t have to in order to succeed, says Sham Gad for Investopedia.
Here are some pointers to mastering a craft. You’ll probably see that they can apply in any aspect of your life, whether it’s surfing, golfing or investing.
- Practice Makes Perfect: While there’s no doubt that practice very often leads to improvement, it’s not practice that sets Woods apart; it’s perfect practice. When Woods is on the driving range hitting balls, he is not just hitting balls for the sake of it. Instead, he hits every single ball with a specific target in mind. Woods will hit 500 balls a day with a specific target for each one. Constant discipline is the key here. Do not invest just to invest-have a target and a strategy in mind when you go about it.
- Having What It Takes To Win: A bull market is similar to an easy golf course, or like a small day of perfect surf. Every shot you take is a good one and every wave is tailor-made. Favorable conditions make it easy to reach your goals. It’s when the going gets tough that sets people apart. In investing, bear market conditions challenge the best of investors because they can be frightening times that lead to decisions based on fear. Cut down on emotional investing by having a strategy such as the 200 day-moving-average in mind, and by setting a stop-loss. (Other ETF investing strategies).
- Investing With Purpose: By investing with a goal in mind, and not just jumping into markets in a dash of hope to make money on a company, you’ll cut down on the chances that your investing will be in vain. Be cautious when everyone is excited about buying stocks – that usually means paying a very rich price. Just keep your strategy in place and don’t budge. (How to keep emotions out the way).
- Keep Expectations In Check: Success in investing is usually correlated with longevity. Time in the water, experience on a course and long-term expectations in the stock market all equate to decisions that are thought out and based on a benefit gained.
- Learning From the Best: Long-term success is not luck. It’s a mix of discipline, hard work and capitalizing on opportunity. By studying the approach of Kelly Slater, Tiger Woods and Warren Buffet, you are already ahead.
For more stories about trend following, visit our trend following category.
For more information about discipline and creating a strategy, read The ETF Trend Following Playbook.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.