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Text comes from the book: “The Smart Investor's Handbook: Why Choose No! earned the most money and with which major shareholders you can go to bed ”(2016), published by Münchener Verlagsgruppe (MVG), reprinted with the kind permission of the publisher.

Here writes for you:

Dr. Markus Elsässer is considered one of the best bankers and fund managers in Europe. Alsasser grew up as the son of an ambassador in London, Hong Kong and Paris. After a banking apprenticeship and business studies, he worked as an auditor before being voted one of Germany's top ten young managers by Manager Magazin in 1986. His industrial career began as Finance Director at Dow Chemical Germany, then he was in Sydney as General Manager for Benckiser and finally in Singapore working as Managing Director Asia-Pacific for the Storck Group. Since 1998 he has been an independent investor and fund advisor as well as the founder of the ME funds, which he has been in charge of for more than 14 years. For several years he worked closely with the well-known New York stock exchange trader Guy Wyser-Pratte. In 2012 he also founded the sports management company Rolfes & Elsässer with professional soccer player Simon Rolfes. He has over 40 years of stock market experience and is a consciously independent investor with great passion. His investment style is characterized by a deep understanding of the business world and its global interrelationships. As one of the very few, he combines practical management experience in industry, including in foreign cultures, with in-depth financial knowledge. As a columnist he writes for Wirtschaftswoche, the magazine BILANZ and as a guest author for wallstreet online.

Investing successfully in finance: listening to yourself and others

You don't need to graduate to become a successful investor. There is also no reason to be put off by the technical jargon of the so-called "financial experts". However, there are no patent remedies either. Start with yourself.

to listen

Investor vs. Speculator: Consider your own psyche

Start with yourself. Find out what type of person you are when it comes to your money. The way you deal with stocks and the stock market should be tailored to your personality. If you honestly pray with yourself, you have a good chance of successfully increasing your capital over the long term.

At the beginning there is the question: speculator or investor? Many investors are wondering why they are so unsuccessful on the stock market over time. Wrong timing, boarded too late, sold too early ... always the same. What is important is a clear positioning: Am I an investor or am I a speculator? There is nothing in between. But what makes a speculator? And what is the difference to the investor?

  1. An investor deals with the assessment of the company in which he intends to invest on the stock exchange. He forms an opinion about the quality of the company and its products. He is concerned with the earnings situation and balance sheet, market position, corporate culture and the company's future prospects. This is how he finally comes to his investment decision: buy or keep away from it. Fluctuating stock exchange prices usually leave him cold. He is interested in his own assessment of the company's value - and not that of the stock exchange traders. In the long term, its calculation of the value will also be reflected in the price on the stock exchangespiegeln.
  2. The speculator on the other hand, keeps an eye on the stock market price. He calculates and ponders how the course of the corporation will develop. How about that Company in detail is more or less irrelevant to him. Speculators often don't even know what the company is manufacturing, what the CEO is called, or where the company's headquarters are located. The speculator must be well acquainted with the financial markets and the stock market mass psychology; not with the individual corporation.

How do you survive a stock market crash?

The famous financier B. Baruch, who successfully survived the big crash on Wall Street 1929, aptly grasped the nature of the speculator a long time ago. The real speculator is a person who makes predictions and who acts before the event occurs. Like a surgeon, he has to be able to research a mass of complicated and contradicting details before he can identify the important factors. Then he must be able to operate with a cool head on the basis of these factors.

The task of determining the factors on the stock exchange is so difficult because we have to penetrate a thick veil of human emotions for this purpose. The price fluctuations are not caused by impersonal economic forces and changing events, but by the reactions of people to these events. The speculator's constant problem is to separate the hard economic facts from the warm feelings of the people involved in these factors. There is no better way to get to the point.

For the success of the stock market, this means: either I open up and strive to become a profound investor, or I strive to be a clever speculator. Those who consistently stay on course on their chosen path have good chances. But one thing is guaranteed to lead to failure: once to "play" the speculator, then to mark the "wise" investor, depending on the situation and mood, sometimes one way or the other - that ends in offside.

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Every investor is different

Before you set foot on the trading floor, you should know what type of investor you actually are. The subject is more important than you think. The problem: There is no bank advisor to help you with this. There are investors who invest their money in stocks over the long term. They ignore price fluctuations and stay invested in a stock for many years and decades. You believe in real assets and avoid paper money and bonds as capital investments.

However, this type of investment is not recommended for every investor. Some just don't have the patience and nerve to hold stocks for so long. Others find it much too boring and itchy to sell shares. You would also prefer to take advantage of other equity opportunities over time. Still others need the sense of achievement to be able to boast of realized course profits.

It is not so much a question of which of the two strategies leads to more success: that is, a real long-term investor versus a de facto short-term speculator. Every investor is strongly advised to find out which category they belong to. He has to be honest with himself in the self-analysis. It doesn't help to imitate successful or prominent large investors or to recite their mantra.

Not everyone is a Warren Buffett

A good example of this is the "case" of Warren Buffett from Omaha. With his long-term strategy of staying committed for decades and rarely selling blocks of shares or companies, he has made a fantastic lifetime achievement. He is downright adored by many small shareholders and investors. His words are listened to devoutly. Thousands make the pilgrimage to remote Omaha for the annual general meeting. They are all trying to emulate him to become such a smart investor too.

But not everyone has a Warren Buffett psychogram. And there the devout investor can travel to Omaha 20 times, he will never have the same nerves as the "Oracle of Omaha". Buffett's Berkshire Hathaway portfolio cannot be transferred one-to-one to one's own portfolio. Most of all, Warren Buffett can be relied on. He has unassailable equity. Despite his overwhelming success, he has no ego problem. He gives his investments a free hand in terms of business. He has proven this for 55 years. This is a rarity worldwide.

It sounds good, of course, if you pretend to be a wise investor who, like Buffett, is prudent and manages his capital in the long term. Who doesn't mind the stock market turmoil. Who also always slept 2008 calmly. Who was not annoyed by the suddenly falling prices during the summer vacation of August 2015. But the question is: are you really knitted like this? Especially investors from respected professions or distinguished circles find it difficult to "come out". Which tax advisor or lawyer likes to admit that he is a nervous gambler? Which general representative of a family of industrialists is happy to confess that he is particularly fascinated by dubious speculations?

Listen to yourself: It's all about self-analysis

After many years of experience, one thing is clear to me: It doesn't matter whether you are about to buy your first share or whether you have been "muddling back and forth" with moderate success for years. A self-analysis is essential. And no bank advisor or asset manager can help you. These people will not be ruthless to you Spiegel hold up.

Anyone who wants to invest their capital in the stock market with pleasure and success in the long term needs to know exactly who they are dealing with "on the command bridge". You yourself are the real risk. Your investment strategy must match your character and nature. If you can do that, you will feel much more comfortable in your own skin. And I wouldn't be surprised if your performance suddenly improved too. Only in this way will you be able to invest money consistently and systematically. Otherwise you will always be carried out of the curve with the stock market storms.

If you just can't do the self-exploration on your own, invite someone for a confidential interview who knows you well from your kindergarten or elementary school days. At that time you were still the way you really are. Only then did it start to get "bent". Well, the stock market is good for a lot.

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One response to "Investing Successfully in Finance: Listening to Yourself and Others"

  1. Michael says:

    Just keep it up

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