Readers may recall that I recommended documenting one’s investment mistakes in an earlier article.
I would like to expand on that concept and further suggest that we should keep an investment journal. This journal would chronicle all our thoughts on investments, including our basis for investment in certain companies or industries, mistakes made, emotions felt and more. Let’s delve into how a journal should be structured and how it can enable us to grow as investors.
I have found that putting thoughts onto paper really helps to crystallize my ideas and also helps me to organize them into coherent segments. When it comes to an investment thesis, writing it down in a journal helps us to focus on what’s important in relation to decision-making. Avoidance of hindsight bias is another benefit of keeping a written journal, as we can always check back on our point of view at a specific instance in time.
We should pen down our thoughts for both buy and sell decisions, as this would also help us (as investors) to refine our investment process and to sharpen our thinking. At this point, I would like to remind readers to be honest with themselves and also be self-critical, in order to learn and grow as much as possible.
This section needs no further emphasis as I had talked about the proper and detailed documentation of each and every investment mistake made. Taking responsibility for mistakes also helps us to grow as humans, rather than blaming external factors or deflecting attention from oneself.
Emotions And Random Thoughts
I have also found it very useful to document my emotions at specific points during my investment journey. These random thoughts and feelings help us to understand ourselves better in terms of how we perceive the world and companies around us, and may also help us to review areas where we think we may need more knowledge or information on.
The Foolish Bottom Line
An investment journal is a useful way to chronicle our thoughts and emotions on investing. It allows us to organize our thoughts and also acts as a check on our emotions. Investors should therefore seriously consider starting a journal as it would help them to grow and improve over time.
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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice.