Investing with Conviction

On last Thursday’s episode of Mad Money Jim Cramer opened with the importance of conviction in your investments. In order to invest in something with conviction you need to have the confidence in the underlying product or service, not just the stock. The youthful investor especially needs a thesis for investing in a stock or other investment.What good does it do you if you invest your hard earned money in a closed end fund with excellent exposure when you are not sure how a closed end fund works or what its holdings are? Or if you buy a financial stock and you do not understand the investments that financial institutions make?


Having conviction means that you do the homework. You are aware of the sector or industry you are involved in but also knowledgeable about how the company you have invested in operates within the sector. The youthful investor only invests because they are aware of the wonderful management, the excellent products and/or services they provide, see great future growth, and are cautious of the risks involved.

So how do you spend your 1 hour of homework per holding per week? The best resource if your holdings are in stocks is Sign up for the CAPS community (which is free) and establish a watchlist of your stocks. Each time you log in all relevant articles pertaining to your choice of stock or sector will be right in front of you. This is an excellent way to do homework and my favorite strategy for success. Beyond that keep reading free material here at and manage your investing time appropriately.

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