Investing Skills Can Be Developed

Investing skills are developed over time like learning to play the piano.  You wouldn’t expect to play a concerto the day you first sit down at the piano, so why do people expect a great performance when they place their first investment?  It’s interesting to me that people put more time into learning an instrument than they do in learning to manage their assets more effectively.  The probability of positive returns is so small in music, yet we commit so much time.  Contrastingly, the probability of a positive return is so great in the financial markets, yet we commit so little time.  It’s an anomaly.  Let me suggest three things you can do to improve your investing skills:

1. Make Time to Develop Your Investing Skills

Investing skills requires time to develop.  My daughter’s piano teacher expects a half an hour of practice everyday.  The book Outliers, by Malcom Gladwell, puts forth the premise that to be an expert in your field requires a devotion to one’s craft for at least 10,000 hours.   I am not sure that successful trading requires 10,000 hours, but I do know that if you do not set aside time to practice, you’ll never master the craft.  The fact is simple:  successful investors – professional or otherwise – set time aside to master their investing skills.

2. When Your Practice Your Investing Skills, Keep it Real

One challenge in practicing to develop your investing skills is that simulation is easy to cheat.  Whether you’re trading on paper or through a demo platform, it’s easy to let things go.  Going back to my little piano performer, she sometimes gets sloppy in her posture, fingering, timing and tempo.  I remember her teacher telling her, “Practice does not make perfect.  Perfect practice makes perfect.”  Since investing is a skill, keep things as real and disciplined as possible so that you practice is beneficial in real life environments.

3. Keep Your Eyes Open for Ways to Develop Your Investing Skills

The good Lord gave you eyes to learn. When practicing your investing skills keep your eyes open and stay observant.  Watch how the market forms, how it develops.  Watch how your strategies interact with the market during the repetitive iterations of your practice sessions.  Skill is developed through testing, observation, adjustments and more testing, but skills development cannot occur if you don’t see the details in both the big AND small picture.  My daughter’s performance on the piano can be altered dramatically depending on the position and pressure of the strike of her finger on the keyboard.  Developing your investing skills requires your attention to detail and your attention to detail will pay dividends in your performance.

I know that not everyone shares my love and passion for investing.  I know there are returns from learning an instrument that cannot measured in monetary forms.  I know that not everyone has the capacity to put the time into practicing his or her investing skills as I have.  Fortunately, investing skills can yield positive returns quickly and a little practice goes a long way.  Investing is a skill that has a high probability of success.  Investing skills can be learned by anyone with the desire to master it.

Author: Shawn Lucas |

About Shawn Lucas

Shawn Lucas is the founder and fund manager at Apiary Fund. He began his career as a broker for Fidelity and Charles Schwab where he worked the trading desk and processed orders for high net worth investors. An expert in the field of technical and economic analysis of the financial markets, Lucas has since established his reputation as a thought leader and guest speaker for several financial companies including Reuters and TD Ameritrade. He has traveled extensively throughout the world providing lectures, training, consulting, and expert testimony to companies and individuals on the art and science of financial analysis. Lucas has authored sixteen books and studies on the use of technical and economic analysis in stock, option, and futures trading. His simple and methodical approach to the markets has helped thousands of investors better understand and improve their performance and profitability in the financial markets.

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2 Responses to Investing Skills Can Be Developed

  1. Nathan Allred January 9, 2013 at 9:05 pm #

    I personally set aside 30 min a day to reading and expanding my knowledge of the markets. It is like a knife… if you don’t keep it sharp you lose your edge.

    Great article!

    • Chuck Boyer January 25, 2013 at 11:11 am #

      Hi, Shawn and Nate!

      Just now saw Tom Lund’s Post(s) in my Message Box.

      Shawn: Very nice and helpful article!

      Nate: Love your “knife” analogy! Any suggestions on what reading you do would
      be appreciated. Of course, I know the Apiary website has a plethora of
      information/articles.

      Also, at least for me, REreading things would help to keep my “knife” sharp.

      MANY thanks to BOTH of you for for all you have done for us “Bees” !!! :-)

      Sincerely,

      Chuck B.