One Factor that Separates Good Investors From Bad Ones

What’s the best way to buy compelling stocks? Ideally, you can buy amazing companies for a reasonable price, but in this current environment, that might not always be the case.

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Low-interest rates might be a boon for investors who have held for a while now. Conversely, low-interest rates and the current non-quantitative, quantitative easing program, which helps to bolster stocks may contribute to lower value-oriented opportunities in large-cap stocks.

So what is a value-oriented investor to do?

One option is to turn to bitcoin, gold, small caps, and micro caps.

But what are the best ways to analyze these assets when investing for the long term?

Let’s take a look at the one fundamental factor to pay attention to when investing in small caps and micro caps.

Have the Right Mindset

The main component to pay attention to making significant investments is your refining your mindset.

Remember that your mindset determines and guides your decision-making process. Your mindset is your protocol. The right mindset creates impressive results, and a poor one destroys your cash and overall portfolio.

Many investors like you may go treasure hunting with micro caps or small caps. Investors like you may expect to see unrealistic returns in this sector. But remember that while small caps and micro caps offer significant promise, they may not always be fifteen or twenty bagger investments. Keep your expectations in order by following a few simple tips.

• Start with an industry that you are comfortable following.
• Stick with companies that continue to show excellent promise with consistent earnings and which carry minimal debt positions relative to their peers in the industry.
• Select twenty companies that meet your criteria and then narrow your list down to just a handful of stocks. Refine your list of stocks to allow you to focus on companies that will make a substantial difference in your portfolio.
• Practice patience. Many investors fail to practice patience in their investing careers, and it destroys their portfolio. They may pick a few random companies that they don’t understand fully and gloss over the fundamentals. They may even select a great company and sell too soon.
• Remember to look at companies that currently dominate a niche sector or are likely to dominate the niche sector over the long term. Companies that have some monopoly position in their niche market can truly have excellent returns. These companies will provide distinctive products and services. They will do so by creating a new category within an existing area (like streaming content when everyone else is selling DVDs) or will provide superior products that capture a significant percentage of the market. These corporations have a unique advantage, and they will be able to implement barriers that hold competitors at bay.

The right mindset is vital because it makes you look for specific companies that are durable and have an opportunity to continue to grow over time. It is this factor that will help you stick through tough times and help you hold on to your thesis.

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