Proper expectations are the key to investing with peace of mind.  Do not expect to predict or forecast stock prices and movements.

Many investors confuse gambling and speculating with investing. Investing does not require an accurate prediction of the future. Gambling and speculating does require this accurate prediction of the future.

Please keep in mind that the equity markets are random and unpredictable. Accurately predicting the future is a matter of luck and not skill.

Lately I have heard potential ‘investors’ discussing speculation in bitcoin or marijuana stocks or free energy stocks or hot real estate deals guaranteeing very high returns. This list is endless and is nothing more than gambling and speculating.

Most of these gamblers are looking for a short cut to riches. They feel if they find the perfect investment they will become filthy rich and quit working. Their goal is to live the life of leisure with no responsibilities and accountable to no one.

They want to substitute gambling for a savings program and a prudent portfolio.

Most will be very disappointed and end up with a shortfall in their retirement savings plan.

Do not expect to pick winning stocks and beat the market.

Do expect to achieve close-to-market returns over time and to see daily, weekly and yearly volatility.  Reduce your costs, use diversification, and sit tight.  If you expect the impossible you will be frustrated, unhappy and fearful.

To reach your long term goals you must own equities….globally diversify….rebalance.