The Hardest Parts About Investing (With Solutions)

10 of the hardest parts about investing in the stock market and how to solve them

Welcome to The Profit Zone đź‘‹

Where thousands of millionaires, CEO’s and high-performing entrepreneurs read the #1 financial newsletter on the web.

Happy Monday!

Let’s start the week off strong.

The agenda for today:

👉 A Word From Our Sponsor Sure Dividend: High-Quality Dividend Stocks, Long-Term Plan

 đź‘‰ The 5 Hardest Parts About Investing (With Solutions)

👉 Get our FREE Dividend Stock Checklist

The Dividend Kings | The Best-Of-The-Best Dividend Stocks

Sure Dividend researches the best dividend growth stocks for investors looking to build rising passive income over time…

And the best-of-the-best are the elite Dividend Kings.

A stock must have 50+ consecutive years of dividend increases to be included on Sure Dividend’s Dividend King list.

Only 53 stocks qualify for the exclusive Dividend Kings list.

These are businesses that have increased their dividend every year since the 1970s, despite recessions, wars, pandemics, and changing technology.

Their incredible dividend growth streaks are evidence of both a durable competitive advantage, and a shareholder-friendly management culture willing to reward investors with rising dividends.

Instantly get your free Dividend Kings spreadsheet of all 53 now by clicking the link below:

“When you’re up to bat, you’re better off hitting consistent singles than trying to knock one out of the park”

- Dividend Dominator

The 5 Hardest Parts About Investing (With Solutions)

Problem #1: Managing Your Emotions

Fear and greed can lead to impulsive decision-making.

For example, panic-selling during a market downturn or buying into the hype when the market goes on a bull run.

Solution #1: It’s important to know WHY you bought in the first place. If you know WHY and if that thesis hasn’t changed and the fundamentals are healthy, there is no reason to get emotional and sell.

Additionally, if you know WHY you’re investing and you have a strategy in place, there’s no reason to give into the hype and invest in stocks that don’t fit your risk tolerance or end goal.

I wrote a post on behavioural investing and how to manage your emotions. You can read it below:

Problem #2: Trying to time the market

Trying to predict when to buy or sell based on short-term market volatility is extremely difficult and even more risky.

When someone says the market is at the bottom/top, I can assure you they have no idea what they’re talking about and are only making a guess.

Solution #2: Time IN the market > TIMING the market. Get as much money invested as early as you can and let compounding do the work for you. Dollar Cost Averaging (DCA) works great to eliminate the desire to time the market.

I wrote a post on the pros and cons of Dollar Cost Averaging, you can read it below:

Problem #3: Choosing the Right Stocks

There are thousands of stocks available, within many different types of sectors and tons of locations around the globe. This makes choosing the right stocks extremely difficult for the average investor who doesn’t know what to look for.

Solution #3: I have 2 solutions for you.

1) Get my free dividend checklist that will take you through a step-by-step analysis to find only high-quality dividend stocks (it’s 100% free)

Having Trouble Analyzing Dividend Stocks? Try Our FREE Dividend Stock Checklist.

Login or Subscribe to participate in polls.

2) Sign up for a Snowball Analytics account where you can track your portfolio, see your dividend income update in real-time, use projection tools to stay on track with your goals and use the stock screener to filter by your own personalized criteria so you can eliminate the junk stocks that don’t fit in your portfolio.

Use code “dividenddomination” to get a discount on all premium plans.

Problem #4: Risk Management

Balancing risk and reward is a tricky task for the average investor.

Taking on too much risk can lead to big losses if you’re not careful, but being too conservative may lead to missing out on returns you otherwise could have had.

You must strike a balance between the two.

Solution #4: Your aim should be to match the stocks in your portfolio to your risk tolerance. Too many times I’ve seen investors who say they have a moderate risk tolerance but their portfolio’s are full of small-cap tech. There has to be some alignment there.

Learn how to value risk and reward using the Sharpe Ratio. This ratio divides a portfolio's excess returns by a measure of its volatility to assess risk-adjusted performance.

I wrote a post on how to use the Sharpe Ratio. Read it below:

Problem #5: Market Sentiment vs. Fundamental

The stock price may not always reflect the company's actual performance or intrinsic value, making it hard to figure out what you should be paying for your shares.

Market sentiment is a large driver of stock prices. When a company is hyped up, the price typically rises with it, ignoring all fundamentals.

That’s great if you’re a day trader and want to make a quick dollar, but we’re investors…

Which is why it’s always smart to go back to the basics and value the stock in comparison to market sentiment.

Solution #5: Understanding how to value a stock based on its current fundamentals and future projections is a skill every investor needs to learn. A $500 stock could be cheap and a $50 stock could be expensive. It all comes down to the intrinsic value of the company.

I wrote a post on why stock prices don’t mean sh*t. You can read it below:

See you in the next one!

Alex (The Dividend Dominator)
Founder and CEO of Dividend Domination Inc.
Follow me on Twitter, Instagram and LinkedIn

If you’re having trouble analyzing dividend stocks and want a step-by-step checklist you can use to find the best companies in the market.

We’ve got you covered.

Introducing (as well as mentioned above) Dividend Dominator’s Dividend Stock Checklist.

I’ve included some of the most important metrics to look at when analyzing dividend stocks.

Now you can have this by your side and check off the boxes one by one to be more confident you’re making the right investment decisions.

Having Trouble Analyzing Dividend Stocks? Try Our FREE Dividend Stock Checklist.

Login or Subscribe to participate in polls.

Miss last weeks FREE newsletter? Read it below:

Miss last weeks PREMIUM newsletter? Read it below:

Did you enjoy this newsletter?

Login or Subscribe to participate in polls.

  • My Website - a one-stop shop for all things dividend investing.

  • Financial Domination - learn how to set up an effective budget, figure out your investor profile, use stock screeners and rebalance your portfolio without paying someone to do it for you.

  • The Complete Investors Accelerator Pack - everything you need to build a dividend portfolio that grows on itself. Learn more about dividend investing, how to analyze dividend stocks, what to do with your dividends and how to build a stream of passive income through the stock market.

  • Beehiiv - sign up for Beehiiv and start your own newsletter today.

  • TweetHunter - let the software do the tweeting for you. The only scheduler you’ll ever need. This tool makes me money in my sleep. Give it a try for free.

Disclaimer: The publisher does not guarantee the accuracy or completeness of the information provided in this page. All statements and expressions herein are the sole opinion of the author or paid advertiser.

Dividend Domination Inc. is a publisher of financial information, not an investment advisor. We do not provide personalized or individualized investment advice or information that is tailored to the needs of any particular recipient.  

THE INFORMATION CONTAINED ON THIS WEBSITE IS NOT AND SHOULD NOT BE CONSTRUED AS INVESTMENT ADVICE, AND DOES NOT PURPORT TO BE AND DOES NOT EXPRESS ANY OPINION AS TO THE PRICE AT WHICH THE SECURITIES OF ANY COMPANY MAY TRADE AT ANY TIME.  THE INFORMATION AND OPINIONS PROVIDED HEREIN SHOULD NOT BE TAKEN AS SPECIFIC ADVICE ON THE MERITS OF ANY INVESTMENT DECISION.  INVESTORS SHOULD MAKE THEIR OWN INVESTIGATION AND DECISIONS REGARDING THE PROSPECTS OF ANY COMPANY DISCUSSED HEREIN BASED ON SUCH INVESTORS’ OWN REVIEW OF PUBLICLY AVAILABLE INFORMATION AND SHOULD NOT RELY ON THE INFORMATION CONTAINED HEREIN.

Any projections, market outlooks or estimates herein are forward-looking statements and are inherently unreliable. They are based upon certain assumptions and should not be construed to be indicative of the actual events that will occur.  Other events that were not taken into account may occur and may significantly affect the returns or performance of the securities discussed herein.  The information provided herein is based on matters as they exist as of the date of preparation and not as of any future date, and the publisher undertakes no obligation to correct, update or revise the information in this document or to otherwise provide any additional material.

The publisher, its affiliates, and clients of the publisher or its affiliates may currently have long or short positions in the securities of the companies mentioned herein or may have such a position in the future (and therefore may profit from fluctuations in the trading price of the securities). To the extent such persons do have such positions, there is no guarantee that such persons will maintain such positions.

Neither the publisher nor any of its affiliates accept any liability whatsoever for any direct or consequential loss howsoever arising, directly or indirectly, from any use of the information contained herein.

By using the Site or any affiliated social media account, you are indicating your consent and agreement to this disclaimer and our terms of use. Unauthorized reproduction of this newsletter or its contents by photocopy, facsimile or any other means is illegal and punishable by law.

Reply

or to participate.