There was a study completed within the education system back in 1969 that showed the effectiveness of different types of learning. The Cone of Learning, as it was known, revealed that the least effective way to learn is by reading and lecture and the most effective way to learn is by doing. The next most effective way is through simulating the real experience or in our case Paper Trading. When people ‘do’ or ’simulate’ then they remember at least 90% of the information. Compare this to reading which has just a 10% rate of success.

I’ve always found it interesting that our education system basically has the entire thing backwards. In my opinion, too much time is dedicated to simply reading and listening to teachers/professors. I’ve always found this a difficult way to learn and the research agrees with me.

So what does this mean to us as investors? First of all, it does not mean you shouldn’t read or attend seminars. Obviously, reading books and attending seminars are great ways to learn new strategies and become inspired. But, if you don’t quickly put this new knowledge into action you will lose it.

We’re quickly approaching a new year and many of us will create goals and dreams for the year to come. But let me tell you from experience if you don’t write these things down and start doing the real thing or at least simulating the real experience through paper trading then you’ll quickly find yourself in December of next year wondering where the time went and asking yourself why you are no closer to your goals of becoming an active investor than you were the year before.

As the studies have shown ‘Active Learning’ is the best way to learn. Education can replace fear. Ignorance is often times easier but it is usually the result of fear. Don’t go through your financial life afraid. Start actively learning today by using the tools on this site and the other sites that we recommend.