Data Driven Investor: Your Pre-Investment Decisions Might Be Behind Your Stock Market Losses Despite Investing in Quality Assets

Investors who focus on buying quality assets, such as industry-leading companies, tend to perform well over the long term. However, there may be several issues getting to that long-term.

In fact, investing in quality assets is no guarantee of success. And many prospective investors have thrown in the towel after seeing initial losses. Ensuring that you avoid that outcome could help substantially improve your investment returns. Even if you don’t improve your investment picks.

Several factors are at play when investing.

The first is simply buying into a stock – even a great one – without a game plan. Having a plan in place ensures that investors not only know what they’re getting into. Rather, it includes what happens after the buy.

It may be prudent to have a game plan for what to buy and sell when markets are more volatile.

Investors who quickly sell during a market selloff rather than buy shares of a great company could miss out.

A market decline may offer a great chance to buy a quality company on a discount. Market selloffs tend to paralyze some investors, allowing those who plan ahead to profit.

That’s the importance of having a plan. Of course, investors also need to stick to that plan. Otherwise, they could turn a potentially great investment into a short-term loss.

To read the other key factors to consider before investing, click here.