I enjoy looking at and analysing markets every day, however my investment philosophy is as such that it is not required. I take a long-term approach. This is the safest and most relaxed way of investing, but still opens up a lot of upside in the long-term. All you need is: patience, discipline and consistency.

The beginner’s way

Basically the point is this: the global market returns around 8% percent per year on average. The S&P (American market) is returning even more. In order to profit from this you need to invest in this market. It is best to do this monthly. You start benefiting from compound interest (see why do I need to invest). Generally it is believed it is difficult to outperform or time the market, especially when you have little knowledge and experience with investing. It does not matter a lot what the market is doing since you invest the same amount every month, and you do this consistently regardless of market conditions. I do this myself also, I invest monthly just after pay day.

It is important to be disciplined and not forget to invest, and to never interrupt the cycle: do not sell in downturns.

Looking further

I follow the beginner’s way. However, I also do some other things that might be considered risky in order to try to achieve a return higher than the average market return. You have two options: one: just follow the beginner’s way, generally this is preferred to people who do not want to think or worry about their investments. However, once you are confident that you can follow the beginner’s way and you start to be interested in and having more idea’s about the markets, you can start to invest in a different way.

Value investing

One of these things I do is called “value investing”. I select quality stocks and markets that are currently cheap (hence the name, these stocks are “undervalued”), and have great long-term potential (in my humble opinion). This is generally believed to be difficult to do and requires most of all patience.

Macro investing

Another is macro investing. This means looking at large patterns in the economy and positioning your portfolio as such to profit from these larger patterns and forces at play. This is generally believed to be difficult and requires above average knowledge of economics and capacity for conceptual thinking. Also it requires knowledge about how companies should react to such patterns. It is regarded quite risky since you might be wrong about these patterns.

Contrarian investing

I like to take a different view than the consensus, and look further in the future for opportunities. This means that my short-term returns might be low. But I believe I will be rewarded in the future.

A contrarian investor is comfortable being different, even enjoys it. He (or she) is able to invest unemotionally and patiently. He operates on the basis of conviction not popular narrative. He enjoys looking where other people are not looking.
 
He understands that popularity is risk and that conversely unpopularity is opportunity. In disaster, as so often, lay the germs of salvation. As the Daoist saying goes: when adversity strikes, treat it as a blessing, when fortune strikes, treat it as a disaster.

I recommend you follow at least the beginner’s way, and that if you are comfortable and interested, you start experimenting with other investment philosophies to complement the beginner’s way.

Remember: invest monthly, regardless of market conditions. Do not interrupt the compounding by selling.

Now that you have an investment philosophy, you can learn how to practically invest.