If you were to search for investing information online, what you would find is that more than 70% of the material is related to strategies. Most of the websites had put strategies on the first spot and besides all of that, the statistics in the investing world remain the same: we have a majority of people losing money, and a small number of people constantly making money.
Since investing strategies are in the spotlight and despite that, people do not manage to make money, we have decided to write this article in which we will explain why investing strategies are overrated.
Weaknesses and their impact on your performance
What beginners fail to understand when it comes to investing is that each strategy has its own strengths and weaknesses. Because of that, losses are part of the process in this industry, and no matter how good you are, at some point in time, you will lose money.
Does that mean investing is just a failure?
Absolutely not! What differentiated the people who manage to make money from those who don’t is their ability to get past those mistakes. They manage to do that by using a number of tools.
Risk management is the first one. They do not risk all their money on a single asset/instrument, they allocated a certain percentage for each investment, they diversify their portfolio, and so forth.
Second of all, they know how to deal with losses. Professionals simply understand that losses are part of the game and manage to overcome them with ease, leaving them behind right after they appeared.
They have developed a certain mindset and approach investing in a different way than the majority of the people. In order to change the results you have now, you must first change the actions that you take.
Focusing on finding the perfect strategy won’t be enough. That is why investing strategies are overrated. Because success in investing is linked to a longer series of variables, not just the strategy.
You must start by analyzing your current performance, see how your strategy performs, what things you are missing out, what risk management you use, what mindset you have and how you manage to integrate all of them in such a way that it generates consistent returns.
We hope we have made you understand better why you should stop thinking so much about the investing strategy and start to focus on the other important things that count.