Improving Investor Behavior: Don’t just own shares — share ownership

Can you name five companies whose products or services you use almost daily What top brands are your family members unable to live without I ll go first Apple Nine out of in my extended family use an iPhone on the Verizon setup Google I search for answers to just about everything multiple times per day usually in a Chrome web browser Berkshire Hathaway They re the holding company behind Geico Duracell Burlington Railroad and See s Candy which is a personal favorite J P Morgan Chase This is the biggest bank and the credit card provider powered by Visa we all use Proctor Gamble For the quicker picker upper Bounty the best a man can get Gillette and hair you can t get enough of Head Shoulders we reach for P G products They make nearly everything under the sink and in the laundry room I ll bet your list has chosen overlap with mine and that we share even more than five in common We consistently rely on and budget for these brands and businesses in our daily pursuits Steve Booren handout Now imagine that you could own part of these fruitful long-lasting businesses and it wouldn t require boardroom visits or restroom cleanings Instead you can purchase shares Warren Buffett would agree Buying what you know is a wise investing principle When you log into your outlay account do you see a list of stocks and their prices or a list of real companies you rely on every day Imagine no ticker symbols No flashing red or green arrows Just a few of the businesses that influence your daily life Now ask yourself If the price of these companies were to drop would you stop using their products or services This isn t a trick question Understanding that you re the partial owner of real companies not a speculator in abstract stock tickers shifts everything Far too often people meld the concept of the sphere with the business activity or their financial future But in reality the area is just a collection of daily prices driven largely by headlines and emotions Businesses on the other hand are real They hire people They make things solve problems and serve customers The best ones innovate relentlessly grow shareholder value increase earning and improve efficiency If the industry were to drop in price I bet you d still buy shampoo You d still pay your phone bill You d still hop on Netflix tonight to find a new show The distinction between stocks and businesses may sound subtle but it s fundamental and it becomes clear when you develop an ownership mentality Prices can swing wildly based on moods and news But a well-managed company still serves its customers earns profits and reinvests in its future Earlier this year the S P was dominated by a handful of high-flying tech names priced at record-high valuations Then within just a sparse weeks the sector dropped nearly from its peak Did those businesses suddenly become less innovative Did people stop using their products Did their long-term earning power collapse overnight Of lesson not What collapsed was sentiment The tariff tantrum reared its head fear took the wheel investors got spooked and prices fell This quick emotional reaction was driven largely by unexpected news The stock field is often like a funhouse mirror distorting reality in both directions When times are great and things feel good it s easy to fall into greed and chase high prices Conversely when things get scary and uncertain it s easy to panic Resisting those urges no matter how logical they may seem is good stake behavior The temptation to react will unfailingly exist but panicking and selling great companies has never been a winning strategy What separates achieving investors isn t their ability to predict the domain but their good financing behavior when it matters the greater part Related Articles Improving Investor Behavior History over headlines Improving Investor Behavior Meeting Mr Field Improving Investor Behavior We plan for this Buinesses like those I ve listed have delivered something remarkable over decades the slow steady relentless compounding of value Their stock prices may be volatile but their results trend upward Earnings rise dividends grow and shareholders who stay invested are typically rewarded I believe the greatest returns don t come from picking the fastest growing stocks but instead from fostering good capital behavior and sticking to a long-term perspective To invest requires optimism believing that no matter what happens day-to-day our future will be brighter Markets may consist of numbers and headlines but investing is ultimately human When you re tempted to check your portfolio five times a day remember you re not just holding stocks you re part-owner in businesses you rely on and understand That little shift in thinking can improve investor behavior and make all the difference in your financial success Then the next time volatility strikes and people are running for the exits take a breath Your job is to stay focused on long-term ownership of those quality companies you ve chosen the ones that improve lives and create lasting value Steve Booren is the founder of Prosperion Financial Advisors in Greenwood Village He is the author of Blind Spots The Mental Mistakes Investors Make and Intelligent Investing Your Guide to a Growing Retirement Income He was named by Forbes as a Best-in-State Wealth Advisor and a Barron s Top Advisor by State