The vast majority of people who invest in the stock market do so without a goal or a good plan. Many have no plans at all. Unfortunately, a good plan is not an option, it's not a luxury nor is it something to think about if time permits. Rather it is an absolute necessity that must be prepared before taking action. Without a plan, all of the best resources and advantages in the world will be for naught. With a plan, even the simplest tools and resources can be combined to produce great benefits.
The Stock Market is somewhat like a force of nature. It wields tremendous power and moves forward with a seemingly irresistible force. Too often individuals are caught up in its flow and, unable to escape, quickly overwhelmed.
However, it does not have to that way. With a good goal, a plan and a few time-tested rules in place, you can escape the clutches of the market monster and thrive in a world littered with the remains of bad investment decisions. The importance of setting goals and creating plans is so crucial, I'm going to revisit what you need to do. It should be obvious that if you do not have an investment goal, you will not know where you're going.
To put it into perspective, would you jump into a car, in a strange city, and just follow the road without knowing where it led? If you did that you'd probably find yourself lost and out of fuel. That's why most people have a destination in mind when they start.
Investing is no different. If you do not know what your investment goals are, you're destined to wander aimlessly in the market's wilderness, making one bad decision after another. By setting your goals, whether it's investing for retirement, your children's college or a three-month family vacation, you can put the appropriate plan into place (such as a long-term, medium-term, or short-term plan).
If you're investing, say, for the long-term, then you can safely ignore short-term market conditions because they will not affect you. However if you do not know your goal, then you will not know whether short-term market fluctuations will affect you or not. That's not a good position to be in.
Once you know your goal you'll need to implement a good plan to get you there.
Many investors lose money because they invest using a hit-and-miss, gut-feeling approach. They buy and sell when they "feel" it is the right time. Unfortunately "feelings" usually equate to large losses. Successful investing, like anything else, requires a plan that has been fully researched and historically proven to produce results.
So take a moment to review your investment goals and plans. If you find that you do not have any, clear your calendar and create some. It can be the most profitable time you spend in your own life.