Stock Investor Patience Creates Greater Returns

I’ve found that one of the reasons I’ve become so much more consistent with my gains in the stock market over the past few years is the patience I’ve developed as an investor.  I used to try to trade once per week, kind of a dollar cost averaging type move.  I figured I would catch some bad trades and would be certain of catching some good trades.  That plan really doesn’t make much sense when you sit back and look at it.  I was almost forcing myself to invest even when the good trades weren’t there.

Looking at my trading just in the past month reminded of this.  I entered into most of my November option contracts in one week last month and have only traded once per week since then.  As the market has shot up I haven’t been able to find the stocks I think are worth trading.  I used to feel I was losing money by not trading.  I felt like I was missing opportunities if I wasn’t bringing in steady revenue each week.  Before long I found I was actually causing missed opportunities for greater profits trading this way.

By having patience in my investing and waiting for the right trades to come to me instead of chasing them I have greater liquidity.  When the right trading opportunities present themselves I can pour more resources (cash and time used to research) into the stocks I like at better prices.  In most of the trades I write about you’ll notice I say, “when XYZ was trading at $##.##, my limit order hit….”  Using these limit orders makes this waiting for the right price automatic and again removes more of the emotional aspects from investing.  On most of the stocks I talk about and don’t end up trading on I had limit order waiting for it to dip.  More than they do, these stocks don’t come down to the prices I want, but when they do I make a bigger profit.  With so many equities to choose from, waiting is crucial. If you are not reading this post on www.mytradersjournal.com you are reading it from a site that has plagiarized it. 

This patient approach to investing is potentially more important to those of us who still work for a living.  We have many other obligations in our lives including the time we should be working instead of trading.  Using these times where you feel the market is not presenting the right entry points for your stock picks is the perfect time to shine in office and get ahead on other projects.  So much of succeeding in corporate America is perception.  During the past couple of weeks when I haven’t liked many stocks’ prices, I’ve been more outspoken in my office and have shown what a “good employee” I am by volunteering for some projects that others viewed as being a big pain.  As the market settles back into a better range for me, I’ll be able to refocus on my investments while the perception of such a hard worker lingers with my boss and co-workers.