Watching the market can be a giant and a lot of the time stressful task. Investors who have been at the game for many years who have become dulled to the ups and downs of the market can even be tricked by it a few times even though they've seen it so many times before. For an untrained eye however, it becomes all that much more important to watch the fluctuations of the market almost daily.
I was having a chat with one of my buds over our weekly work outs and I found myself giving him a piece of advice that I shouldn't have. Being a new investor, he has been digging his heels in and absorbing as much information as possible from me and other trained sources. This means that he is even more susceptible to listening to all that I have to say since I have been in the market for a little over two years now and I've gotten a pretty
good handle on my own portfolio. As this was the case, I felt and still do that it is my duty to consistently provide advice on how to go about managing his own experience with the market. Because I thought this to be the case, I handed him some advice after he completed his second trade in the month (his first two trades ever!). The problem with the advice was that it was not the best that I could have given. The advice was for all intensive purposes incomplete.
I told him that now that he has put down two trades and acquired two major companies that he should keep his eyes off the market for awhile. My thought process in this was that I knew he didn't have any other funds currently to play with and he didn't need to stress himself out over watching the constantly changing flotations in the market. I did so because I remembered two years ago when I first started investing. I remembered hardly being able to sleep or eat without thinking about how my money was doing.
Being a young investor with nobody to go to for advice, I myself made horrible trades at the beginning of my investing career and therefore made even worse mistakes when I pulled my money out quickly and moved it to other companies at the first sign of trouble downwards. This caused lots of downturn and my ultimate demise in my first year when I decided I'd try to make tons of money with penny stocks. Needless to say, this continued to go horribly until I sat down and actually learned to watch the market and more importantly learned to watch what was causing the fluctuations and how to use them to my advantage.
It turned out that the beast that kept me awake at night and caused some bad eating habits had actually in effect caused my keen eye for the market. Watching the market constantly and even being controlled by it numerous times before had trained me to be almost dulled to the changes that it would continue to do in the future. From this change, I learned when to buy in and how to time the market so that I almost guaranteed myself discounts while so many others bought in at seemingly outrageous prices that my now trained eye would never let me invest in.
In conclusion, I would have to say that my advice to my friend was wrong. I was wrong to suggest that he turn himself away from watching the market so that he can save himself the headache and loss of sleep. In all truth, he should turn his eyes forward at the market and see all the changes that happen daily and learn that they are nothing to fear. He needs to do it to learn that changes can be good and they can bring more successes than failures for a trained investor. As long as you've analyzed the stock well, hold strong and it will return to its glory and if you've invested in a dividend stock, it will continue to pay as it always has.