Sometimes women ask me if it’s a good idea to actively trade in the stock market or even foreign exchange markets. The best answer to this question should be the result of an overall financial plan that includes many elements, such as time, money and risk tolerance related to that money. Risk tolerance is the result of other factors, such as dependents, skills, other income sources and net worth.
Questions relating to your money cannot be answered without other considerations; this is yet another example of a financial principle that is the same as other life principles. The best decisions can’t be made in isolation of other factors.
If you do have an interest in becoming a successful trader as a way to generate income, I would ask:
- Do you have time to devote to becoming skilled?
- Do you have capital to allocate to this endeavor?
- Are you patient enough to paper trade while you learn?
- Do you have the resources to pay a mentor or program to teach you this skill?
- Are you able to make decisions objectively rather than from a place of emotion?
If you are considering becoming actively involved with the financial markets, start by honestly asking the above questions. Money decisions are best made from a holistic perspective, whether that decision involves how you grow your money or how you spend.