Compounding and providing a return on capital should be every investor’s dream. Yet investors get tempted to sell out of their best stocks all of the time because they want to “lock in sudden gains“.

This approach to investing needs to be corrected. After all, if you like a business, why should you sell it because of short time volatility? 

1. Be Patient 

Investors shouldn’t be in a hurry to sell off because they feel bad about seeing losses in their brokerage accounts, even if they say more about the fearfulness of the market rather than the actual long-term prospects of the underlying businesses.

If you can separate the Mr . Market aspects of the stock market and instead take an ownership mindset, you will find much greater success in compounding your wealth in the market over the long term. If you want to succeed in the stock market, embrace these secrets revealed below. Check them out. 

2. Become a Habitual Investor 

Having a volatile market will be of no concern to you if you cultivate the habit of investing monthly or, better still, weekly. Being a habitual investor is profitable in all seasons. When the market is up, you buy less; when it’s less, you buy more. That way, you’re most likely to make a significant return. 

If you invest a certain amount every month, you buy shares in good times and bad times. In good times, the value of your shares increases. For example, suppose you start buying shares in a stock fund that cost 200 NGN per share. You decide you will invest 1,000 NGN every month. So that means you get five shares for your 1,000 NGN. 

The fund has done well a year later, and the share price has risen to 250 NGN. Now you only get four shares for your 1,000 NGN, but you’re happy anyway; the five shares from that first month a year ago have appreciated, 5 x 250 = 1,250, netting a 250 NGN gain. In the second month, the shares were 210 NGN, so that month you got 4.77 shares, netting you a 19O NGN gain, and so forth. In good times, you get fewer shares, which reduces the future potential upside, but it also means you have a nice total gain on your investment.,

While that loss certainly stings, you are getting shares at a discount to the initial purchasing price, ultimately getting more shares for your monthly 1,000 NGN investment. 

If the share price is now 150 NGN, you can snap up 6.67 shares per month for as long as the slump lasts. When things brighten up six months later, you have purchased 6 x 6.67 = 40 shares at what might have been the bottom. Then, even with a modest rebound to 180 NGN a share, you have gained 40 x 30 = 1,200 NGN from those bargain shares alone. 

Meanwhile, the loss from the previous months has shrunk, meaning you are already back in the black with a vengeance. When the share price returns to the original 200 NGN, the initial loss is completely wiped out, while the gain of the six months’ bargain shares grows to 6 x 50 = 3000 NGN.

If you keep your cool and stick with the plan even when the market is down, you get more shares for your money. These additional shares boost investment returns when the market rebounds. This is a big part of why regular stock investors get a higher long-term return compared to safer investments despite the temporary ups and downs in the market.

3. If You Can’t Hold a Stock for 10 Years, Don’t Bother Buying It 

You need to be more concerned about a business’s overall performance than its present fluctuations. The market is largely driven by sentiments and a large group of investors jumping in and out of the market. 

Short-term stock market “noise” shouldn’t be the basis of purchasing or selling a stock. 

4. Focus on Long-Term Fundamental Analysis

The strength, in-depth growth, competitiveness, and level of debt and liability of a business are paramount. 

Before investing in a business, know what you own to continue holding the stock even during market declines. You can’t control the market movement, but you can control what business you invest your hard-earned money in.

5. Learn to Do Nothing 

Many of us are raised with the idea that taking action is the key to successful investment. That rarely occurs. Good investors are patient enough to wait years for nothing to happen. They also have the patience to hold off on buying or selling equities when the entire market is rushing. Since it sounds too routine, most experienced investors will refrain from discussing it. But this is also crucial. It’s intentional passivity rather than inaction in this situation.

Even though many investors are aware of this patience secret, only a select few use it, and they are the ones who prosper over time.

In Summary 

No matter how knowledgeable you are about using the stock market investment to achieve financial freedom. No matter how many articles, books, seminars, or training sessions you attend, if none of the advice you receive is implemented, nothing you learn will be successful.

This statement means that you need more than just learning and comprehending stock market terminologies to help you succeed in the stock market. Stop letting fear rule your investment decisions; join the exclusive group of successful investors who use the wealth-building strategies described in this article.