As an investor, you have internalized beliefs about yourself, whether positive or negative, that may affect the results you're seeing.
Here, in a video recorded live on Jan. 6, 2021, Motley Fool Analyst Tim Beyers and Fool.com Contributor Brian Stoffel challenge you to dig deep and ask yourself the following key questions to help navigate times of doubt.
- What is it that you believe about yourself as an investor?
- Why are you thinking about making this trade or making this move?
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Tim Beyers: As investors, what we know, I want to speak both to new and experienced investors here so we can get to the practical benefits of this. I'm going to say this twice because this is super important in my opinion here. As an investor, you have beliefs about yourself. I'd say that one more time. As an investor, you have beliefs about yourself.
What you want to know, to get to what Asit was just saying, that internal narrator is operating off those beliefs. If you, that internal narrator, is telling you really toxic things, that is because you have some toxic beliefs about yourself as an investor.
What we want to get to -- we're talking about mindset here and the inner game of investing -- and I know we repeat ourselves so often here, but is the idea that if you can get in the game and stay in the game.
And then we very often on these sessions get questions of like, "I know, but how do I keep myself from selling in fear? How do I keep myself from trading?" This is the session for you. This right here is the session where we're getting to that because these questions are going to be asking you to challenge and identify what is it that you believe.
What is it that you believe about yourself as an investor?
With that, here's question number one. You can apply these questions when you're thinking about making an action. Here's where we start, "Why am I thinking about making this trade or making this move? Why am I thinking about this?"
Let me give you an example, the market is wobbly today because there's some really ugly news (referring to the U.S. Capitol riots). It happens. The market does not like it when the news is unpredictable, when there are things that we don't expect, things that we haven't seen before, things can get wobbly, and some of the stocks at I really like, especially the cloud stocks, they are getting hit today.
You may be thinking about, just right now, you maybe saying like, "Man, I got to sell because I don't know what's going to happen here.'" Why are you thinking that? That's question number one.
I think where this helps you, Brian, and I will kick it to you here, is you want to be able to answer it and say, "Well, why am I thinking about this?" Your answer can give you some insight into what it is you're feeling.
Tim Beyers: You are muted.
Brian Stoffel: Exactly. Because what I was going to say is, is the trick behind all of this is not fooling yourself, right?
Tim Beyers: Yes.
Brian Stoffel: Because when you're saying, "Why am I thinking about making this trade?" It's almost like you want to have a partner to talk this out with so that they can hold you accountable. Because you could say, 'Well, because this is a quality company." Then they say, "Okay, well, tell me why you think it's a quality company. Tell me what you see happening. Tell me a little bit about their moat." The point being that, if you just give surface-level answers and you don't dive into those beliefs that Tim is talking about, you're more likely to end up making mistakes. You're more likely to put yourself in a trade or in an investment where, as soon as something passes.
I'm just going to say this, I'm not suggesting you do it. Maybe you go buy bitcoin (BTC -0.24%) because you see the Capitol has been breached. Talk about that. Well, I'm doing it because there is uncertainty in this and this, and then you find out, "Okay, so what is the belief? What is the belief here?" That is that I'm fearful. I'm fearful, and this will take away the fear. Well, here is the thing. It's not going to take away the fear. A certain period of time is going to pass and you're going to have to ask yourself why you're doing it.
I guess that's the long way of saying that it's really important. You'll get better at this as you go along. It's really important that you identify the feelings. No one's perfect at it. There are no experts at this.
Tim Beyers: No.
Brian Stoffel: There's just veterans. That's the difference.
Tim Beyers: [laughs] I like it. There is a great Brian Stoffel quote right there. There are no experts at this, there are just veterans. I love that.