There is no shortage of investment literature. It usually breaks down into investment theory (time value of money, risk free rates and the like) and the newer field of behavioural finance.
Once you have a decent grasp on the former, my bet is that it's the latter that'll determine your success or failure.
So here's my question: why are you paying attention to what the market thinks?
Do you avoid the list of the most shorted stocks, like iSentia Group Ltd (ASX:ISD), Domino's Pizza Enterprises Ltd. (ASX:DMP) and Aconex Ltd (ASX:ACX).
Do you check to see whether your portfolio went up yesterday? And versus the market?
Why?
You're trying to beat the market.
So you have to — by definition — be different to the market.
And yet, you look to the market (in the short- and medium-term) for validation?
I understand why it's tempting. And we've all been there, so it's not a criticism. But if more people understood that simple reality (and mentally and emotionally prepared themselves for the rough ride), they'd be much, much better off.
Of course, for those who want to lower volatility a notch, dividends help. You get a regular cheque (real money, not just a portfolio on a screen!), helping keep the choppy waters just a little calmer.
