Investing at its core takes a lot of courage and a great leap of faith. As a newcomer to the business, you need to have enough confidence that whoever is running the business possesses the ability to make the business thrive and grow over time, make customers happy, and build a self-sustaining empire. Many potential investors do not start the business journey because they don’t believe they can get over the fear that they can make a bad choice or buy shares of a company that, in the end, does not live up to its potential or expectations.
Good day readers, you are welcome to today’s edition. We will be discussing the stock market and how optimism can affect the outcome of stock market investments. This content is from my platform, and in my platform, there is a lot of related content. In fact, we are committed to helping you find the balance between your health and financial life, helping you to achieve financial freedom while leading a long, healthy, and fruitful life.
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In this edition, we will be discussing optimism in the stock market. Optimism is simply seeing the good in everything, I believe. When you look at some of the most enterprising and successful business people and businesses in history, you will see that many of the businesses have leaders who have a very high sense of optimism about their prospects of success.
Founders who are still CEOs of their businesses, such as Amazon’s Jeff Bezos, Netflix’s Reed Hastings, and Shopify’s Tobi Lutke, all have something in common. They are always in search of ways to further their achievements and successes, irrespective of the height they have attained in their various businesses.
Most times, optimism is a source of success. Optimistic leaders in business rarely give in to defeat and are highly adaptive, changing gears to find alternative solutions to their various challenges. Pessimists, in general, never even get past the first real business challenge they face, let alone stick to hopes of achieving great business success. They never get to the top of the business food chain.
The Benefits of Being Optimistic in Investment
Why should investors be optimistic?
As an investor, it is even easier to be optimistic. Judging by stats, a business leader does not run so many companies at the same time, and the prospects of the business leader are usually channeled towards the one or two companies they run. On the other hand, investors can invest in a thousand companies at the same time, increasing their chances of making smart investments.
Having a portfolio that contains more than twenty stocks gives a sense of assurance that no single company would do so much damage to your chances of attaining financial freedom, no matter how poorly that company’s stock performs. Also, the very idea of stock investment is based on the principle of optimism. After all, it is impossible for stock to lose more than a hundred percent of its value, but it can multiply to infinite percentages.
Also, having a great stock in your portfolio would go a long way to mitigate any damages done by the poorly performing stocks and still leave you with some profit most of the time.
There is a thin line between blind devotion and rational optimism.
Being optimistic is one thing; blind devotion is another. There is a good number of reasons for investors to be optimistic while investing in stocks or building their portfolios, but that does not mean the investor should not be pragmatic. Having blind devotion to a corporate leader or business can lead to devastating consequences, especially when you see the signs.
The business can be so volatile that even smart people find it difficult to succeed too. Some of their stocks end up losing, even after having great business models and plans. To be an investor, you need to think like a business owner or corporate leader. This helps you become less prone to falling for mistakes and tricks that eventually turn out to be too good to be true. Having in-depth knowledge about the business you are investing in is a great way to make more rational investment decisions.
To be a great investor, you will need a perfect mix of reason and optimism. Being an optimist will make you believe in the business and invest in the first place, but being a rational and reasonable investor will ensure you do not lose faith during those inevitable business setbacks that come to any company. Also, a rational investor always knows when to cut their losses. A good combination of these two traits will make you a great investor in the tricky world of investment.
In conclusion, as an investor, you need to understand that an optimistic view would be to invest or make investments in the hope that your investments would yield returns in the near future. Before you lose faith, ask yourself why you invested in the first place. You also need to understand that the advantages and upside of investing in stocks far outweigh its disadvantages or worst-case scenarios.
Having a good knowledge of the companies you will be investing in will help build your confidence, avoid blind devotions, and make you a rational investor. You can gain more knowledge of the company by visiting their financial records and reports over the past years, visiting shareholders’ meetings to try and understand the vision and mission of the company, and by merely being observant to any slight changes in the stock market.
We have come to the end of this edition regarding Optimism and Investment. If you truly learned something new, please do not forget to subscribe to our platform, join our Facebook page, like and share our blog, and let us know all your thoughts, views, and comments in the comment box below. We would love to hear from you.
Recommended for further reading:
- Stock Market Investing For Beginners: The Investment Guide – How to benefit from the crisis, invest in stocks and generate long-term passive income incl. ETF and Stock Picking Checklist
- The Stock Market Investing Guide #2020: From Beginner to Intelligent Investor within 30 Days – How to Save Money, Generate Passive Income and Reach Financial Freedom
- The Financial Times Guide to Investing:The Definitive Companion to Investment and the Financial Markets: The Definitive Companion to Investment and the Financial Markets
- Stock Market Investing For Beginners: The Investment Guide
- The Barefoot Investor: The Only Money Guide You’ll Ever Need