Research: The most crucial aspect of any good investor

Julie Brownlee, Fsp Invest, 12 Mar. 2014

Tags: research, investor, investing, invest, make money, importance of research, peter lynch, how to be a better investor, successful investor

If there was a secret to investing that meant you’d always uncover a winner, everyone would be doing it. Unfortunately there’s no such thing. But there are things you can do to improve your chances of investing in good shares. One vital part of any good investor’s toolkit is the ability to research. Let’s take a closer look at why this is so important…

Don’t approach investing like a game

Renowned investor, Peter Lynch famously said that: Investing without research is like playing stud poker and never looking at the cards.

If you don’t have the time or want to take the time to do some research, then it’s doubtful that investing is for you, Matthew Carr in Investment U explains.

Investing is not a game. And it isn’t a gamble.

Imagine your life If you joined The South African Investor when we started over 10 years ago.

Had you followed our recommended plays and invested R100,000 annually, you’d be sitting on R2.5 million today... With a 10-year average return that’s almost double the everyday investor.

Don't wait another ten years to take advantage of these gains, join today!

If you’ve not done thorough research on your share selections, you may think otherwise. But if you do your research, the odds are not stacked against you. You can profit.

By taking the time to do some research, spending some extra time digging around, you can find some very valuable pieces of information. For example, study company annual statements looking for trends in numbers.

Don’t believe that investing is all about gut feelings and those with “the Midas touch”. It isn’t. It all comes down to good research.

How you can make money by investing

You can make money from investing by:
  • Taking the time to understand what moves the shares of the companies you’re investing in and why;
  • Knowing what the negative parts and spots of a company are; and
  • Understanding when is the best time to buy.
If you don’t want to invest your time doing some research, certainly don’t invest your money.

So there you have it, why research is the most crucial aspect of any good investor.

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