Ask Colin

I seem to have learned so much about investing and trading much so fast that I am getting information overload. How can I sift out what is relevant to me?

What you have been experiencing is very common for anyone learning something new. At first you take in everything eagerly. However, then it all gets to be too much to assimilate. You actually seem to go backwards before you start to assimilate it all and go forwards again. This is very well known by psychologists and is loosely called the learning curve.

What I have found is that you keep plugging away at it. Sooner or later you notice the same ideas are coming through again and again. At that point you should start to put them into a mental framework or a trading/investing plan. From there it should be all upward. As each new thing comes along, you evaluate it and either incorporate it into your framework or plan (maybe throwing out something that was inferior) or discard it as not as good as what you already have. In this way we never stop learning.

In my book Building Wealth in the Stock Market, I present my trading plan which I do to provide a framework around which others can build something to suit them. I show what risks have to be managed, how I do that and why. Full details of what is in the book is on my web site.