In the game of Investing, we need the help of these three C's. These three C's will guide us in trouble times and will help us find the right path. The three C's are
Commitment: You should be committed to self-discipline, continuous self improvement in the form of learning and committed to yourself and your family. I can't stress the fact self-discipline more than anything. You have to be highly disciplined so that while investing you are able to keep your emotions away. You should make a very rational decision. Just think of a situation where you have invested 1 Lakh and it has became now 65,000. Will you able to absorb this kind of emotional loss and think rationally? This is the acid test.
Investment involves understanding the behaviour of the market and the people who operate in the market. There are 3 kinds of people who operate in the market, speculators, traders and investers. Speculators are like gamblers who come to the market when newspapers are full of articles about the rising sensex. Traders make their living out of the volatility of the market. It involves very high risk. And the last creed are investors.
Benjamin Graham defines investment operation is one which, upon thorough analysis promises safety of principal and an adequate return. Operations not meeting these requirements are speculative.
Investing is not like passing your 12th exam. Its like a doctor's degree. You have to keep reading, keep on improving on what you have learned by reading, listening to others and exchanging ideas with others. To say in simple words, Investing is not an easy job and that why Fund Managers are paid an hefty amount!
You would find the instant profit, instant gratification of the speculators attractive. Newspapers and TV channels would be buzz with them, but you would have to hold your ground to avoid getting swept away with these. This would require a strong commitment to your ideas, in yourself and your ability. Investing tests your mental and emotional skills because its your hard earned money on the line of fire. So you should be ready like a soldier. This is not an easy game, but dont worry, we all as group can ride this rough game till the end, but then again we would require commitment. The buzzword is commitment.