I know it’s difficult for beginners to do this, but do not get too fixated on the stock you bought's share price movement. And please don’t use this strategy where you sell now and buy back later when it gets lower and then sell again when it goes up. This sounds logical and smart, but if this so-called brilliant strategy works, everyone will be rich already. 

The Market Doesn’t Care What You Want

The thing is that the market doesn’t care who you are and doesn’t care what you want. You may be lucky a few times, but this strategy is not sustainable. Until and unless you have some special superpower and can predict 100% correctly that the share price will go down after you sell at the highest price, please don’t make this stupid move.

Remember, we can't control how the share price moves. Most people want to control the uncontrollable. And the undervalued price that you bought for the company, you may not get back again next time. There's also a possibility that if you sell, the share price will continue to go up and will never come down again. So you sell “high” and buy higher.

Focus on the Business, Not the Share Price

Remember again not to be too fixated on the share price in terms of profit or loss. The share price is just the price that you pay to own the company. Please focus on the business, i.e., is the net profit higher, will the business be better in the future, any further growth plans, etc. If the business has been doing well for years, the share price will also increase in tandem with the increase in business value.

Why Retail Investors Settle for Small Gains

After speaking with so many people, I realised why a lot of retail investors love to “invest” short-term and are happy with just a few percentages of profit. This is the reason why “most people are happy to sell for a profit of 20% or 30% because they don't have the conviction and foresight to see the company grow for the next 500% or 1,000% in value.”

Look Beyond Financial Statements

Financial statements assure you of a company’s past performance, but it can’t assure you of their future performance. Understanding the executive management, the company culture, the strategy to strengthen their moat, their relentless business execution, and future potential growth is what gels everything together to give you the confidence to buy when the stock plunges and the conviction to hold the stock for multi-bagger returns.

Patience Is Key to Long-Term Wealth

If you invest with the expectation of getting an immediate and consistent increase in share price or must achieve a fixed return at a certain period, it's only a matter of time before you give up investing. The real money is made in the waiting. Investors need to wait for the market to come to their senses and realise the true potential of the company. Wealth compounding is a powerful force but requires patience.