The power of the individual investor

Many individuals stay away from investing in the stock market because they feel powerless.  Their losses are greater than their profits.  I know, I am an individual who has seen both success and failure in the market.  When I was successful, the market was my friend.   I felt I was unstoppable and could do it again and again.  My profits I earned I put into other stocks.   Suddenly my losses mounted up.   All I made, I lost.  That was over 5 years ago.   I can only guess, my success was really total luck.  That is what I believed so I stayed away from investing in the market.   Feeling totally powerless, I was afraid to enter the market I enjoyed     The market my nemesis.   I forgot an all important lesson, my parents taught me as a kid.  When you learn how to ride a bike and you fall off, it is very important to get back on again and again.  Soon you will discover the balance required to ride a bike.  

What I did in the stock market was forget this principle.   Successful investors don't quit, they respond to the failure asking why?   We make changes then get back on the bike or in this case back in the market.   

I am now back in the market after analyzing my failure to make profits.   what caused my failure?

*   I used the same principles of success not realizing they wouldn't work in the current market conditions.

*   When I lost money, I continued to buy more shares believing it was better to dollar cost average my shares.     The economy continued to tank, with more losses in the market.

*   Having lost all confidence in my ability, I followed others who thought they knew the market, buying shares they recommended.   More losses.

*   Next my investing was based on positive news forgetting the current price already reflected the good news, the price dropped again with more losses.

*  I bought stocks at prices over inflated as the market pushed up the shares value, I bought at the peak, not realizing the stocks momentum had changed downward.

*   Finally I realized this market required patience.   I needed to find profitable companies whose price was undervalued.   then wait till the economy picks up and investors discover the value causing the stock price to move upward.  Profits would now be realized.  

*   The power of the individual investor comes from their ability to get back on the bike after falling off.   They regain their balance.  They again find joy and succeed.   Profits  will again be earned with the decisions they make based on the reality of the investment, not the response of fear of getting back on.

This is the power of the individual investor.