If you're on a mission to become a better investor, your secret weapon is closer than you think.
Books and teachers are great, but nothing compares to the sage advice that mothers typically dole out. Although some words may have gone in one ear and out the other, you'll look back and be able to unravel some of Mom's lengthy list of do's and don'ts as precious gems to live by today. And believe it or not, it can be extremely helpful when it comes to investing.
As a tribute to all the mothers (and mother figures) out there, we're going down memory lane to extract Mom's collection of jewels that you can apply on your investing journey.
1. Don't fall for FOMO
Mom probably didn't use those exact words, but she may have warned you about FOMO (fear of missing out) somewhere down the line. You may have wanted the latest gadgets, apparel, or look because everyone was raving about it. But carrying that mindset always leaves you on the edge of your seat chasing the next big thing.
This is true even in the investing world. If you're always hunting for the hottest stock because of FOMO, you may end up being an emotional wreck if things don't go your way. Instead, take Mom's advice and focus on having clear goals and a strategy so you'll never have to worry about missing out on anything.
2. Don't buy the first thing you see
If we all just pressed the buy button when an investing opportunity popped up on our radar, we'd most likely be in a ton of trouble in the markets. Luck could work in your favor, but the downside of an investment decision that you're clueless about could leave you sweating bullets at night.
Do what many moms do: compare and proceed with care. They do their due diligence before they purchase products, performing some form of research and comparison analysis to ensure they are getting the best bang for their buck. So before you purchase your next stock, allow this motherly wisdom to replay in your mind.
3. Create a shopping list
Moms hardly ever head to the store without a shopping list.
That shopping list was Mom's version of a watch list. It gives you a point of reference to focus your attention and get familiar with the price movement of assets you are interested in.
Creating your watch list of stocks can allow your brokerage firm to notify you if there was an increase or decrease in the price of an asset so that you can move accordingly. Most importantly, keeping a list of what you want and tracking the stock activity of a few stocks can help you to be more efficient in the markets.
4. Think long term
Moms are often five steps ahead of the game. If Mom ever said no to the candy, piercing, or tattoos, chances are there was a reason behind it. Most often, it was probably just her way of thinking about your future.
Even in the stock market, there will be all types of temptations that come your way — from selling a stock that skyrocketed in value overnight to acquiring the latest penny stock recommendation from your barber. But you have to be able to step back and consider the long-term implications of your investing decisions. You want to think about how your investment decisions can allow you to take advantage of compound interest and maybe even help you to become the millionaire next door.
5. Be patient
This may be one of the hardest lessons to digest. Being patient is not as glamorous as instant gratification, but it has the potential to produce sweeter rewards later.
Mom may have tested our patience when she had presents under the tree that couldn't be unwrapped until Christmas or when you were prompted to wait to take a course in driving. Now, you'll have to relive the wait again as you work to build a portfolio that funds your retirement.
Give Mom some credit
When you think about it, a mother figure's advice can be golden on your investing journey — even if it's not dressed up in the fancy financial lingo investors use today. Moms touch on the basic principles of investing that you'll need to achieve financial success: Do your research, develop goals, and be patient enough to see your long-term vision become reality.
If you ever start to panic as an investor, just think about this timeless advice to keep you going strong. Moms have survived many unexpected situations and thrived. Chances are, you can achieve your investing goals if you keep these words of wisdom in your back pocket.