Using the Markets' Lateral Phases to Sharpen Your Investing Skills
By Anthony Rhodes
For new investors, the stock market can be a terrible place for on the job training. Having to swiftly decipher its coded industrial jargon, and being overwhelmed by its rapidly serpentine movements, the skills required to gain a foundational understanding within this environment can exhaust even the most studious of market learners, and absolutely befuddle those with easily distracted attention spans.
But fear not, my fresh-faced market newbies, for the fates aren't so cruel as to not be willing to provide a respite during this sensory overloading educational experience. One, in which allows you to develop a complete understanding of the market in real time, but without the heightened degree of concentration normally rendered to attain it.
Sound too good to be true? Perhaps. But there are actually times when the market moves in a lateral fashion over extended periods. When it does, such moments provide golden opportunities for novices and professionals alike, to expand their knowledge and extend their expertise, while at the same time both strengthening and sharpening their core investing abilities.
All Quiet On The Western Front
During a period of maturing technologies, little or no political stimulus spending, and mediocre consumer sentiment, we can often create an environment which causes the stock market to move in a lateral fashion. These moments are quite rare, as they are not derived from conventional means; since there is sparse influence to trigger its usually impulsive responses to either fear or excitement. When these moments inevitably arrive, the market generally experiences periods of lower volatility, and decreased trading volumes. While the professionals are off competing in their firms' posh golf outings, or meeting with other prospective investors, you can use this confluence of events as an opportunity to better understand its intricacies and nuances. And the best part is, such learning will be achieved in an environment free of the pulse-pounding pandemonium which routinely accompanies this chaotic setting.
Down Time to Upload
Knowledge is power. And this truth is fully compounded within the confinements of the stock market. Successful investors spend copious amounts of time reading articles, listening to conference calls and researching companies, all with the intent of being supremely prepared when the trading day finally begins. This can often become difficult during normally hectic days, but within these low-intensity lulls, such times can be used to aggressively procure as much data as you can, on as many companies as possible. Since these opportunities only occur rarely in dynamic economies such as ours, maximizing its worth now, will be greatly appreciated down the road. Once the market begins to rotate towards it customary bouts of bedlam, you'll appreciate having had used such moments to expand your bases of knowledge, which should ultimately translate into vastly increased profits for your portfolio.
The value of our time is often determined by how well we use it. With time itself being agnostic towards our allocated usage, the choices we make must therefore reflect our priorities, and take into account the reality that it is only distributed to us in finite amounts. During life's lulls, we can sometimes forget this fact, and believe that our allotment of time will be suspended until these mundane moments have passed. A wiser choice to make would be to use these precious periods as opportunities for self improvement, and to make ourselves worthy of the limited time we have remaining.
(Anthony Rhodes is the President and owner of wealth management firm The Planning Perspective www.theplanningperspective.com. Do not reproduce without permission.)
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