America is most definitely a goal-based country. Business are always trying to reach a certain level of revenue, the government is trying to spend a certain level of money, and families are trying to move to the South by a certain date to escape the wrath of liberals and taxes.
Some might think that goals are unnecessary and just a waste of time, but I personally think that when you establish a goal and commit to reaching it, more can be accomplished in a shorter amount of time.
By setting investment goals, any committed investor should be able to see improvement in their trading.
What Goals Should I Set?
There are a variety of goals an investor can set. The first that comes to mind is a profit goal, aka I will try and make a 10% overall profit in a year. This is an easy goal to make and the only trick is figuring out a reasonable, but challenging level at witch to set your profit goal.
Next, you could try and set an accuracy goal. By this I mean that you would try and get one winner in every three stocks you invest in. The idea is that you would focus on establishing better opportunities and work on what you do after you invest later.
Finally, a goal of frequency might be established. Some investors get semi-addicted to trading and end up losing a lot of profits to commissions. If you find yourself unable to stay away from the market or just stress out because you can’t stop watching your trades, setting a goal to only trade two times a month might be a good idea. With this, it would cause you to really scrutinize your trades since you only get a couple.
I’ve Set My Goal, Now What?
After you determine a goal, you should then start to brainstorm ways to reach that goal. If you want to make a certain amount a month, start by establishing a trading system, lowering commissions, or setting automatic sell points.
Once a method has been created, you have to make your goal a habit. The biggest problem with people failing to make their goals is a lack of commitment. We all know how it goes: you start off really excited about your new plan and then one day you are short on time so you just say you’ll do it tomorrow and then again and again until you finally have no goal.
Making your goal a routine is the single most important thing you can do in order to reach your goal.
Another thing to do is document everything. I suggest starting an investing journal, writing your goal down on page 1, and then writing progress reports and thoughts as you move forward. This will help you stay committed and increase your efficiency in completing your goal.
How Did I Do?
You’ve reached a point where either your time limit is up or your goal is met. Now we evaluate the process. Start by seeing if you met your goal. If you did, was it close at the finish or did you meet it with ease? If it was tough, try raising the goal a little bit for the next time, if it was easy, challenge yourself by raising your goal reasonably.
If you didn’t meet your goal, how close were you? Could you have met it with a little more time? Was the goal unrealistic? Evaluate your progress and reset your goals to better meet your ability. Write your analysis down and keep progressing.
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