This message bears repeating. Again and again.
It is so important for you, as an investor, to know what your investment philosophy is.
The Wall Street bullies want you to believe that the “markets fail” and that someone can tell you the best investments to invest in at all times. They will tell you they know when to get in and out of the market. These bullies want you to listen to their forecasts and move your money accordingly.
What the Wall Street bullies won’t tell you is they have no idea where the market is going or which asset classes will outperform.
Your beliefs have been formed by the financial media hype. They lead you to believe there is someone who can predict the future. No one can.
There are two camps to investment philosophy, “markets work” and “markets fail”…
On the “markets work” side, make sure to follow these action steps. If you are in this camp, you will need to:
- Eliminate speculative investment techniques.
- Work with a financial professional who believes that markets work.
- Ignore media hype.
- Set lifelong financial goals.
- Prudently diversify.
- Identify your risk tolerance.
On the “markets fail” side, consider the following. If you believe that markets fail, then you are morally obligated to:
- Pursue speculative techniques.
- Work with the bullies who actively gamble with your money.
- Stay connected to the internet, magazines, talk shows, news shows, internet shows, and download apps to your cell phone so you can track up-and-down markets.
- Read every article about stocks and options that you can find, wonder and worry about the market, what might happen next—whatever you do, don’t miss the next hot stock tip.
It is up to you to determine how you want your money invested. Personally I believe “markets work”. I believe your time would be much better spent improving your job skills or learning a new job skill or spending time with family and friends than trying to beat the market.
Remember, there will always be someone who picks the hot stock and gets rich or finds the latest and greatest strategy/asset class etc., the problem for the investor is that this is luck rather than skill. Meaning this feat is unlikely to repeat.
Keep in mind every new ‘hot’ investment idea/strategy/asset class you hear on financial media has a vested interest in you investing all your money. The problem is the seller of these products makes most if not all the profits. Leaving you with a dream and no money.
To succeed long term, you should
own equities…globally diversify…..rebalance.