Investors vs Traders - My duty is to keep you in the loop

There are more than 1000 clients who have been using their CDS accounts between 2008 todate, through me as the Investment Advisor. But one thing I've noticed is that many are wanting to use their accounts and spend time in the Stock market is when the markets are way too high. But another fact I've learnt being a Stock Broker is that this is not new to Sri Lanka, instead it is a global phenomena.

Out of my many clients only a few are investing on a regular basis. What I have noticed in them is that they do it because they have a plan, a vision, a target, or a realization that investing in the Stock Market makes them in charge of their money, without giving it to the Bank or a financial institution to make more money for them and less to you.

Another feature of these few clients is that they know whether they are Investors or Traders. As such they invest or trade based on figuring out who they are. Success for them did not come in a platter, but the important thing is was the REASON behind their involvement in the Stock Market is strong, and consistent. This is the same for anyone doing anything in life. Therefore these few clients adapt and pursue unwaveringly.

But most of the clients  on the other hand do not have a plan, or they start with a plan and give up in challenging times. Some say they will never sight the market, only to see them coming back when things are highly dangerous. Many of them are cautioned at the time but do not heed to advise and burn. Some are always want tips or news to trade, else they do not want to come in. Most of these rumours or news driven clients are the ones who get caught to those who initiate those rumours or news. When they realize that they were caught, they do not want to sell and take the loss, thinking that what they believed will happen some day. Some of them become so carried away, that they even buy on credit or margin and still hold even when their entire investment is gone. This happens every day, when we are in a continuous uptrend for many months or years.  All this is not because they do not know, but they did not come with a plan. If they had plan, then they never would have lost their investment instead they could have come out of it and recover.  

My experience tells me that knowledge and experience in the stock market is like life. You always learn and you always experience until your last day. Even in life you need to stick to a plan, if not that person will not succeed and be satisfied.

The lesson in this whole thing is that you need to ask one question. That is "WHAT IS MY PLAN in the Stock Market ???". Sadly many of the clients do not ask themselves of that. If so there must be many of my clients investing or trading regularly just like the few clients who do.

Making money in the stock market is not easy, but not hard.