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PLAYING TODAY’S STOCK MARKET TIP #9: MAINTAIN A SIMPLE APPROACH TO INVESTING!

October 24th, 2011

MAINTAIN A SIMPLE APPROACH TO INVESTING: As you expand your knowledge of stock market investing, keep reminding yourself that it is not necessary for you to know everything. The fact is that there is a never-ending supply of information, opinions, theories, and stories regarding stock market investing.

You will find that the media is especially fixated on stories that explain why the market either goes up or down on a particular day. But while hindsight is 20/20, even the experts can never agree on what the markets will do in the future. Therefore, the savvy investor must not get distracted by what is simply “interesting” about the market; instead, they stay focused on what is most useful.

What you want do in terms of stock market investing is to find reliable information that leads to action. Dr. Wallace Wattles described a concept called “efficient action” in his 1903 classic book, The Science of Getting Rich. Efficient action is the habit of consistently doing the right thing on a person’s journey towards wealth. The point that Dr. Wattles was making is that financial wealth is created with certainty over time by simply adhering to the right daily habits of thinking, emotion, and action.

In terms of investing in the stock market, efficient action would include the following habits that are described in this book: (1) manage your money wisely through prudent asset allocation, (2) “invest” the major part and “play” with the minor part of your assets, (3) play the stock market game correctly on a consistent basis, (4) maintain your emotional balance, and (5) appreciate the entire experience. Reminder yourself that success in the stock market comes from acquiring the habits of efficient action, instead of wasting time trying to absorb the endless streams of financial news, information and opinions.

Remember that the confused mind does nothing. Keep your approach to stock market investing simple by resisting the urge to know everything. The way to success is by acquiring the clarity to take correct decisive action when opportunities periodically present themselves to you.

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“There is a secret to investing that cuts a path directly to the profits that you’re looking for. The secret is simplicity. The more elementary your investment style, the more confidence you can be of making money in the long run.”

Jane Bryant Quinn

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