Moneyweek's editor-in-chief, Merryn Somerset Webb reckons investors need information, insight and perspective to succeed with investing.
I think that's a good way of looking at it, but how easy is it to achieve those things?
With the internet, there's no difficulty in getting enough information. The problem is that we tend to get too much, so the challenge becomes how to filter through it to focus on what's helpful.
The internet bombards us with opinions about companies and their prospects, about macroeconomic assumptions and guesses, about politics and everything else that may affect the firms we own shares in or those we wish to buy. I reckon it's best to tune all of that out and to concentrate on what the firms behind our shareholdings are saying themselves.
To do that, we can use free sites such as www.investegate.co.uk, which stream all official company announcements. Further information can usually be found on the companies' own websites, including the full version of a firm's annual report. Successful investing is possible with just those two sources of information.
To be interested in individual share-picking in the first place, I reckon most come to the game with a fair bit of life experience under their belts. If nothing else, it usually requires success in another field to earn enough spare capital to invest.
That means most investors can generate many of their own insights about potential and actual investments. The trick is to listen to our own advice and not to assume that others automatically know best. Quite often they don't. To some degree, we all have the ability to process external information and information available internally from experiences and knowledge so that we can make better decisions about our investments.
However, sometimes it's good to work with a consensus by collaborating with others. Other investing professionals can provide us with a sounding board to gauge the validity of our own insights and as a source of external insights that could enhance our own. I like to follow successful fund managers such as active stock pickers Neil Woodford and Mark Slater. They both run investment companies that disclose the shares they hold in their various funds and they both broadcast some of their insights publicly. You can latch onto their Twitter feeds or sign up to emails direct. I'm also keen on The Motley Fool's own subscription share tipping services Share Advisor, Pro and Hidden Winners. The interaction available with these services is among the best available.
Perspective comes from thinking, I reckon. Turn off the computer, go for a walk, go on holiday, mow the lawn, and while doing all that, mull things over. The key to gaining perspective is to step back from the cut and thrust of wiggly share price charts, noisy bulletin boards, mindless news reports, and random predictions about the economy.
As long as we've put some research time in, focused on the information that really counts and chewed over ideas with a network of like-minded professionals, the only way to set things in context is to think of the bigger picture.