Like everyone else or at least most, I filled my bracket for the College Men’s basketball tournament. Every year I try to determine the ‘upsets’ some big some small.
I do not believe anyone has ever picked the perfect bracket. That is, pick the winners of all 64 games. In fact, Warren Buffet promised to give $1 billion to anyone that does. It is a safe bet. You have a much better chance winning the lottery.
Well it is Friday and I already have a miss. Oh well, there goes a $1 billion…..
But what does this have to do with investing. Well every day I am asked by people about the next great stock or strategy. The one that will make them rich overnight. Of course, this needs to be done with little or no risk, they say.
Often, they will say well this guy did it, why not me?
Let’s look at managers that try to pick stocks they believe will outperform the market. They are no better than those that ‘seed’ the NCAA tournament. Who will win? Like stock pickers these pickers have no idea what the future will bring.
If they could pick the winners all four regions would No. 1 vs No. 4 and No. 2 vs No. 3. Then No. 1 vs No. 2. Then all four No. 1s would go the final four. And the overall No.1 would win. Confusing, right?
The odds of some manager picking the right stocks is far greater than picking all 64 games right. But the odds remain quite low.
Besides, most people confuse gambling and speculating with investing.
Gambling and speculating involves being right in the short term. This means instant gratification. Perhaps, this is why casinos and Las Vegas are so popular. The lure of getting rich quick is compelling. There is no waiting. You know very quickly whether you won or not. Even though everyone knows most lose. And nearly all lose long term.
Investing is a long term, life long process.
If you need to invest for growth or just keep up with inflation you need a prudent strategy. One tested by time. A strategy based on scientific research and academia.
Investors that rely on this strategy do not worry about short term volatility. Markets go up and markets go down. But the long term trend is up. Since 1926 the S&P 500 has had an average return of nearly 10% per year. During this time there were downturns of 10% of more 89 times.
WOW. If you want to earn a great return you need to deal with downturns. In some instances, the downturns can be severe. However, over the long term you will succeed.
Find a fiduciary adviser/investor coach to help you through this process. Long term you will succeed.
Regardless of this I will continue to fill out an NCAA men’s basketball. Because it doesn’t cost anything AND you never know….