Do you want to know the secret behind Wall Street? The secret is that there IS no secret. They’re just really good at what they do: making money.
You would think that the best place to look for financial advice would be the ones that are constantly making headlines, even creating the news. But that’s not exactly the case.
It’s true that the financial experts on Wall Street are often very successful. But their goal is to protect their assets and make themselves look good, not give valuable advice. While they may not actually be hiding anything, they are very selective about the information they choose to share with the public.
Mainstream sources like CNBC or Fox Business will never have all the data you need to make a well-informed decision, which is why educating yourself as an investor is so crucial.
Here are a few tips to get you started on becoming your own financial expert.
Tip #1: Identify your investor personality.
In some of my previous posts, I’ve talked about the importance of psychology in financial decision-making. 80% of financial expertise is learning how you make financial decisions, knowing your strengths and weaknesses, and honing your ability to act rationally in an unstable environment.
This is what helps you develop an investor personality and get a sense of what works for YOU.
Start reading about big investors and traders in industries that interest you. What are they doing and how are they doing it? What’s their approach? How do they perform under pressure? These are questions you’ll want to ask yourself as you go.
Follow those investors online and get to know them from every angle. There’s no magic solution or anything particularly new about this. You’re just creating a playbook of the personality traits you want to emulate as an investor and building on that persona.
Tip #2: Turn off the noise.
You’ve got a sense of the kind of investor you want to be. Now you have to hone in on the information that will get you there. Need some good sources to get you started? I’ve got a few that you may not have considered before. Favorite experts of mine include Ray Dalio of Bridgewater and from the early days Jesse Livermore.
When it comes down to it, everyone has access to the same information, but not all haves the same tools. Keeping your investor persona in mind and having experts to follow will help you manage, translate, and use that information to your advantage.
The best way to become your own financial expert is to turn off the white noise and narrow your focus. Start discarding any information that doesn’t work for you and pay close attention to the sources that do.
Tip #3: Choose a strategy—and stick to it.
There are hundreds of strategies floating around the market and most of them won’t work for you. The investor persona that you’ve developed, along with the focused expertise you continue to develop should all converge into a single strategy.
You don’t have to reinvent the wheel or make anything up. Most of the work has been done for you already by experts who have spent time working in the market and have made mistakes. Your job now is to learn from them and select a strategy that works for you. And then stick to it.
This is key.Too many investors and traders make the mistake of reacting impulsively to the market instead of committing to their strategy. Wall Street experts don’t switch things up when they feel like it. They know what they want and they don’t deviate from the plan.
If you feel an impulse to invest your assets because of a headline or sudden shift in the market, take some time to check your facts. Go to the financials of the companies you’re interested in. Look at their macro and microtransactions and find evidence that they are going to grow.
Remember, public companies that share their financials, like the Wall Street experts, only share the data that makes them look good. Those projections and charts often show an optimistic, even inaccurate, view. So always check your facts before committing. Look at their competition and whether they have enough resources to develop the technology they say they will.
These tips won’t make you an expert overnight. It takes work and dedication to become a successful investor. But taking the time to evaluate your own psychology, learn from the experts, and hone in on the information that works for you will benefit you ten-fold later.
Once you’ve done that, you can forget everything else.