The PDCA of Investing

Investing successfully is not all that different from operating a business successfully (or doing other things successfully).

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Investing successfully is not all that different from operating a business successfully (or doing other things successfully).

The basic principles of PDCA is applicable to anything really:

  1. Plan
  2. Do
  3. Check
  4. Act

Most people do successfully follow the steps of PDCA very easily with different projects they undertake. But when it comes to investing in the stock market, this simple logic seems to suddenly disappear.

Start by asking yourself if you’ve ever made an investment plan, or what principles you use in investing, how did you do in the past, whether or not you beat your benchmark, and how much improvement did you have.

From my past experience, most people who constantly lose money from investing in the stock market (or unable to increase their wealth) usually only buy and sell stocks without any planning or principles involved. So they don’t know how to measure results or how to continue investing, and in the end, leave it to timing and luck. There is no learning and improvement in investing, despite being in the market for many years.

Since the birth of Jitta, we have always stuck by our mission to make investment easier and better for people around the world.

Therefore, the first thing we developed was the Jitta Intel, which helps analyze and summarize financial statements into simple figures, such as the Jitta Score, Jitta Line, followed by the Jitta Factor, Jitta Signs, and other functions that help find good stocks, such as Browse, Screener, and Comparison. After picking the stocks we’re interested in or already invested in, there are also useful functions like Follow/Alert, which keep track of the stocks’ progress.

In your investment process, Jitta will aid you in the “Do” stage, enabling you to invest with principles (of course, these are concepts from Warren Buffet which have proven to be successful, and confirmed by the Jitta Ranking)

From what I’ve gathered, Jitta users have been very satisfied with our role improving their investment, are happier to invest, and of course, overall make better returns.

So Jitta now plans to focus on other aspects that investors are still mission, such as the Plan, Check and Act steps.

Jitta has created the Jitta Financial Planner to help you plan your investment; how much should you save, how much return you expect from your investments, and in how many years should you reach your target.

Even though the Jitta Financial Planner is still in its first stage, I believe that it helps in the planning and the target setting process, to begin with. If any of you have further suggestions, please feel free to do so as well.

After the “Plan” comes the “Check” and “Act”, which, which are a bit more difficult than Planning, but equally important. Perhaps more so, because they are involved in measuring results, learning, and improving your investment.

From what I’ve seen, most people lack the process in measuring results, or worse, many never keep track of any data and results of their investments.

  • Because of this, some people might be ecstatic with a 100% profit within 1 month, but forget all the other times that they have lost, and don’t even compare their overall yearly return to that of the market index; or measure their port’s growth by their benchmark, for example.
  • Some people also do not separate their personal savings account from their investment account, jumbling all the cash in there, and making them unable to measure their true results.
  • Some people are unaware of how many times and how much do they profit or lose from, say 10 times of investment.
  • Some people don’t even know the proportion of each stock that they are holding in their portfolio, how much money they have in these stocks, and how risky is their port. They do no know which stocks have made particularly high profits, and why. Or which that have particularly costed them, and why.

To “Check” and “Act” well is to look at the overall portfolio return, or your overall investment, so that you are able to better understand your investment method, hence make better investment decisions.

The better your “Check” and “Act” processes are, the more improved your “Plan” and “Do” stages will be, and investing will be much easier and a lot more fun.

For everyone to be able to “Check” and “Act” well, our Jitta team, led by Chonlatee Jumratsee, is developing the Jitta Portfolio. Currently, it is being given a trial run by our beta users, but it will soon be ready (those who are interested in using this can get their past investment information ready for the program).

Once Jitta Portfolio is a hundred percent completed, the PDCA process will be full-fledged as well.

I hope that all of our Jitta tools will help you perform PDCA to improve your investments to create better returns, as we aim to do so with Jitta’s mission.

P.s. When Warren Buffet first started investing, his only target was to beat the market index every year. And with setting a target, actual doing, evaluating, and improving his investment method, he was able to beat the index almost every year for over 50 years, making him a legend for investors today.

Author: Jitta

Jitta simplifies financial analysis for value investors and financial advisors alike. Our stock-analysis platform offers actionable advice to help them make better investment decisions and generate higher returns based on a simple principle: “Buy a wonderful company at a fair price.” And we do that by creating Jitta Ranking, our proprietary algorithm that ranks stocks based on their profit potential. Returns generated by Jitta Ranking since 2009 has outpaced that produced by the S&P500 index by a large margin. Jitta’s technology processes information like a human mind, assessing complicated data and digesting it into an easy-to-use and intuitive format. Its key features include Jitta Score, an indicator of a wonderful company; Jitta Line, an indicator of a company's fair price; financial statements-made-simple Jitta FactSheet; Jitta Playlist, an intelligent screener and backtest system in one; and Jitta Portfolio, a smarter investment-tracking mechanism.

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