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If you have been following the stock market lately, you have certainly noticed the wild swings in stock prices. I have been investing in this market personally for the past seven turbulent years. While I have been going through the wild ride, it has taught me some lessons which I can apply to internet marketing as well.
I got interested in the stock market because owning stocks allows you to own a piece of great businesses. I got interested in internet marketing because of the potential to create my own great business. Both of these fields are exciting and help you become an active part of the great capitalistic system.
So I have summarized five things that internet marketing and stock market investing have in common.
1) Patience is a virtue
If you buy a basket of stocks today, you wonâ€™t be rich today, tomorrow or within six months. You need to be patient enough to wait until the returns start to compound. The stocks may even decline in value in the short run, but it will eventually increase in price.
Similarly, starting a website or blog today does not make you rich right away.Â It takes time to build readership and gain trust from people and search engines alike. Initially, you may have to invest your time and money and not get the returns right away. In the long run, patience and hard work will serve you well.
2) Quality is better than quantity
Buying hundreds of low quality stocks based on a tip from someone does not get you anywhere. It is much better to do your own analysis and pick a few stocks based on fundamentals, technical analysis and economic environment.
In the same way, launching several sites at the same time with high expectations will set you up for failure. Instead, it is better to focus on a few sites where you can dedicate most of your effort. Customers can sense quality right away. One quality site can outperform hundreds of low quality sites.
3) Higher risk means more reward.
The return from an investment is highly correlated with the amount of risk you take. If you bet big, you may lose a lot of money but you can also outperform everyone else. This does not mean you should blindly pick stocks and foolishly make a high risk bet. If you bought stocks at the bottom of the market in 2009, you would have done quite well. Everyone was predicting gloom and doom at the time, and it would have been a high risk investment. Use your knowledge and trust your guts before making a high risk investment in stocks.
Internet marketing works the same way. Sometimes you need to be bold and willing to take a risk that not many people are willing to take. Innovative strategies can pay off big ifÂ they work. Again, using your knowledge and experience to make a high risk bet is much better than an amateur risky bet.
4) Ignore noise and be strategic.
Every time you turn on CNBC or read financial blogs, you will see plethora of advice from several Wall Street professionals. Some tips are good, while others are just to manipulate the market so that they can sell you stocks at the top of the market. If you are not careful, it is easy to be a sucker in the market. Most people buy at the top and sell at the bottomÂ based on opinions from others. Instead be strategic so that you can ignore ideas that do not make sense.
In internet marketing, you are also bombarded with thousands of ideas ranging from SEO link building strategies to monetization ideas. I have seen some excellent tips from great bloggers, but also it is easy to get swayed by a deceitful article that is trying to sell you a product to increase your traffic quickly. And sometimes you will end up paying a lot of money to these vendors, just to get penalized by google a few months later. Be careful because it is not fun to be a sucker. Build a long term strategy and donâ€™t necessarily agree with everything you read on the internet.
5) Don’t follow the herd.
I think this is one of the most important strategies if you truly want to be successful. Donâ€™t buy a stock just because everyone is buying and making money. Contrarians can make a lot of money by going against the herd. If you bought internet stocks in 2000, housing stocks in 2006 or oil stocks in 2007 at its peak, you would have lost money even though everyone loved those sectors.
Distinguishing yourself from others and providing quality in your site is key to long term success. If someone became successful blogging about a certain topic, it is too easy to imitate. However, the chance of being successful is much higher if you choose a niche topic that not many people are writing about. Or you can innovate and come up with a new way to add value to customers and earn money in internet marketing.
Just like the big drop in Dow Jones Average caught you off-guard, you may have been surprised by the drop in your internet traffic from search engine updates such as Panda. However, patience and good strategy will definitely help you overcome these hurdles in the long run whether you are an internet marketer or a stock trader.
19 thoughts on “What Internet Marketers Can Learn From Stock Market Investors”
Some great points. I like to research, research, research and hold. Good solid dividend paying stocks that I can hold for years and years are what I look for. A bit like looking for a niche I suppose, something I’m learning about now.
Absolutely. You can increase your return further by reinvesting the dividends from these solid dividend paying stocks. If you buy them in your IRA, you won’t have to worry about taxes either.
You learn something new everyday..
Shoe, these posts are horrible! I just picture people sitting around trying to come up with ideas for these posts “Uhhh…3 reasons why internet marketing is like my Honda Accord. Both were made in Japan…no ,that won’t work. Uhh. Because when you accelerate, you move faster! BOYYAHH!”
I think one-line posts from you would fare better than these posts.
I especially agree with number 4, it can be easy to get distracted by the “shiny objects” but it is always better to have a strategic plan and stick with it.
As a stock investor and an internet marketer these were great awesome way to get me thinking about the similarities.
These are good, I think this person could have talked more about the IM side and a little less about the stock market.
Very good comparisons. But the two are also quite different. With stocks you’re at the mercy of the market. With Internet marketing you can change niches easily.
So true. So much to learn but do we really put the effort of equating stuff like this?
Great post! I agree strongly with number 2. Quality always beats out quantity.
Yes I have seen stock marketers and they wait and wait for the right time and then they make their deal. Also they put a lot of hardwork in analyzing make their things work pretty easily.
Great comparisons. While I would say number three as something along the lines of “Higher risk means the potential for more reward,” but still overall very strong comparisons. Furthermore, number two is a personal favorite.
I swear those points are from a recent zombie movie that i watched the other day….
great tips, and i agree with this “Quality is better than quantity”. It is an essential one for internet market investors. When you are investing, make sure that you are investing in right way.
Great article and loved the way that you compare the stock market to internet marketing especially about being patient as it can take a long time in both cases but in the end you will see growth that will give you a nice return. I think a lot of people get quickly frustrated and like stocks jump ship during a downturn or low traffic time period and forget that at some point both the traffic and stock will rise if you continue to work hard.
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Higher risk does mean more reward. Just be aware of what your getting yourself into, and do it the right way.
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