This past week I attended an investment symposium in Cincinnati. Ironically, the symposium was in a large downtown casino. Every week I contrast true investing from gambling and speculating. And here I was walking through a large casino that seemed to be busy at all times of the day. As I walked through I noticed the faces of some of the gamblers and in all cases it had the look of desperation and false hope.
I’m sure many of these gamblers felt they had an edge because they were sophisticated and had a ‘system’. But if you looked closer it was not a ‘system’ but rather thinly veiled superstitions. They relied on luck and when the luck ran out the sophisticated gambler moved on to the next ‘system’.
A prudent investor will not switch from one hot ‘system’ to the next. With the help of an investor coach they will develop a prudent portfolio designed for them and then remain disciplined to that process. That process includes among other things the following three rules:
- Own equities and high quality fixed income.
- Globally diversify.
The Wall Street bullies have extensive marketing campaigns, which begin as early as grade school, to keep the public gambling and speculating. You can tell you are gambling and speculating if you are doing any or all of the following:
- Stock picking.
- Market timing (Getting into and out of the markets at the ‘right’ times)
- Track record investing (Investing in the hot managers or hot asset class)
These bullies forget to tell the public that these activities are in the best interest of the bullies and NOT you. These bullies use your emotions to keep your money on the move. Because their fees depend on you keeping your money moving from one strategy to the next.
Have you ever meet someone who won big at a casino? Did you find it curious why the casino would then give these ‘winners’ ‘free’ rooms and food. Perhaps even ‘free’ transportation back to the casino? Well these casinos do this because they know that if you continue gambling you will give all your winnings back.
Don’t get me wrong, gambling and speculating are not all bad. It’s ok as long as you gamble and speculate for entertainment purposes only. However it is not ok when this is your retirement plan strategy.
The Wall Street bullies believe the same thing if you continue trading their fees will continue and you will lose. These bullies will continue to use your emotions to entice you to gamble and speculate with your savings.
These gamblers and speculators will have continuous anxiety because they do not know what to do next. Their faces have the look of desperation and false hope.
Stop empowering the Wall Street bullies and take control of your own financial future. Fire your broker/agent and hire an investor coach/fiduciary adviser.