In this episode, Mirriam MacWilliams, Chief Trainer/Wealth Mentor, teaches you how to make the good decisions.
Video 6 – What Makes A Good Investor
WHAT MAKES A GOOD INVESTOR?
And as soon as you start to apply certain trading rules, gain experience, have certain results, you can very well be on your way to doing that.
The idea is to not look for 1,000 percent windfalls. Do something consistently. What consistently can you do, that everytime you do, can yield a certain return. That’s what you are after.
What are the common pitfalls or weaknesses of failed investors?[/text_block]
COMMON INVESTOR PITFALLS
Having your entire investment capital in the market or in just a few stocks in the same sector, can also be a pitfall.
Trading without a stop loss as it creates emotions in trading. And the pitfall of an investor or trader is to learn how to manage risk, and you can only manage risk by getting out of a position in the event it goes against you.
Again, understand how options work and understand the risks associated with options trading as well.
Managing your emotions will also be a key when it comes to making smart investments?[/text_block]
COMMON INVESTOR PITFALLS
Or in the unlikely event that it goes against me, it is sold for me. Just watch the market for 15 minutes, and see whether you need to make any adjustments in your stop-loss. And if not, you need to switch off the PC and not monitor the market any longer. Your success is not going to be based on your ability to watch the stock market.
Is 10, 15 minutes enough?
That would be enough, any more than that, for investing, is too much. You will start to be concerned about daily fluctuations of the stock price, and it truly is a hands-off strategy.
What are some of the concepts you should keep in mind when investing overseas?
Again, to have a high probability of success in the investing world, the key is to be able to stack the probability of success in your favour. And for me, as an active investor, I am looking to have access to information about a company.
I have a certain ease of being able to generate information – for stocks that are traded in the US – through free websites. I am able to get certain details, about a company, based on the charts that I may extract from the markets sometimes for free, from the internet. So, have the ability to have access about that company, in order to make an educated decision about the strength or weakness of that company.
How can early success be disruptive?[/text_block]
FOR NEW INVESTORS
For many students here, in Asia, as well as in the US, as soon as they start to generate revenue, their live capital, a lot of that money starts to be put in the market. Maybe they are not prepared for that percent loss that they are supposed to look at.
For investors like yourself, who are able to make a success of their investments, what are you doing right?
Well, I guess I have a formula that I follow. And I have a passion for the market.
What is the formula?[/text_block]
WHAT IS THE FORMULA?
You have to have expectations, and these expectations have to be realistic. In terms of what my expected move on the stock is – a 10 percent move on the stock in the US is a very realistic achievable, expectational move. Be realistic in terms of results, be realistic in terms of time that it’s going to take for you to generate your wealth.
What does your trading plan look like?
Basically for me, I have a certain basket of stocks that I work with, on average, about 20 to 22 stocks. I look at my entire basket of stocks, always with an investing perspective. I want to be at a position where the strongest stock can generate the 10 percent move from my point of entry.
I don’t try to cherry pick the bottom, or the top of the stock. I look to capture the middle moves of the stock. So, that again, a 10 percent move can yield for me, a 100 percent return on my investment capital.
Does how you see or treat money reflect in how you play with money?
Yes. Once we have a certain level of respect for money, we have a certain fear of losing it. I don’t want you to be in a panic about it. I want you to have a healthy fear and respect of losing money so that you are more inclined to be disciplined in your trading style, than not disciplined.
You don’t say that well, I lost it today, I simply get it back tomorrow. I want you to have the approach that I need to recognise that not every trade will go my way, I am in the business of stacking up the probabilities in my favour, and I can only do that if I have a plan of action.
To go from 12,000 dollars to 2 million dollars, is that a dream that investors can only dream about?
It’s not a dream but the road getting there, was not easy for me. I started out the first year learning how to invest. I participated in different trainings.
Then my second year, was a year of flip flopping – you win some, you lose some. You win big, you lose big. You lose small, you win big.
It wasn’t until my third year that I started investing, and I understood the power of options. I understood all I needed to capture was the 10 percent. I don’t care if the stock continues to go higher, all I wanted to capture was 10 percent, based on what the stock had previously done. I generated a plan of action, that I follow to this day.
I have very high returns now. And it’s interesting because I generated a newsletter every week that I let students know what I am expecting to do, before the stock actually makes those moves, and we progressively follow those trades, so that people that are starting out, have some sort of roadmap, if you will, direction.
It’s fascinating to see the results, even for me, at the end of year. And this is all based on me, following a plan.
But sometimes markets just don’t go your way. What are your alternative plans?[/text_block]
Jogesh Doshi, Business Owner
“Great success with Mirriam’s startegies! Recently in AMZN and MCD for 35% returns. Thank you Mirriam for everything!”
Thomas Pendi, Self Employed
“The training is so easy. I never traded options before. I have turned US$5,000 to US$11,000 in 7 weeks…“
Before I take a trade, I am psychologically prepared myself that I may potentially see a loss, because now, I do everything in my power to minimise that loss. And when that loss comes, it is one that I expected to have had happened, otherwise, I could not take the trade.
So I am simply going to wait for another opportunity, and I will capture that money right back.
So think about the worst case scenario and see if you can afford it?[/text_block]
How does investing reflect in your real life?
That’s interesting, because as I started making money in the market, I wanted more of it. And more money in the market, meant investing more time. And I soon had to draw the line.
When my husband and I were in New Zealand, he had plans for us to do things. But I had to wait for the market to open, because I had to adjust my stop loss. And it was difficult because, I decided to invest in the stock market, create a certain level of wealth, so that I can give him time. And here now I was actually taking time away from him.
So, what life’s lessons have taught me is to enjoy your life. To give your family your time. You work, so that you can give your family the best possible things they want. But the most important thing that you can give them is you and your time.[/text_block]