It amazes me how freely the public investor accepts that buying low and selling high is too difficult to execute over a long period of time. Similar to most things in life, investing is without a doubt, a skill game. Closing your eyes and simply investing based on hope or what appears to be a good investment is a recipe for failure.
When was the last time you checked the price of where your 401k purchased the market shortly after your paycheck was automatically deducted? Never or never?
Would you buy a car without looking at the price tag or fully understanding what features the vehicle had? Of course not, yet most retail investors pay little to zero attention to the mutual funds they are invested. Or even the dollar amount it is costing them per month. Does that sound prudent or even logical to you? Is it any wonder the public investor typically buys at the highs and sells at the lows of the market cycle time and time again?
Instead of charts today, I figured it would be fun to lift the hood and attempt to dissect the reasons why we believe the things we do. More importantly, let us attempt to understand where they come from in an effort to evolve as investors.
Below are two searches. Note how when it comes to "writing" we are instructed to simply "write" in 5 out of 8 suggestions. Yet, when investing is the desired skill set, the word "invest" isn't even mentioned -- this is truly SCARY. I'm genuinely afraid to google swimming now.
The search for how to "become a better investor..."
What's the solution? JUST INVEST. If you don't have much money or don't have any skill, start small, buy 1 share of a stock and start from there. I wouldn't recommend it but you could also play around with a simulator but these disconnect the practitioner from the craft.
Think bumper bowling, sure its fun for the kids but when was the last time the pros competed for the world championship with guard rails?
Hopefully, this exercise is shockingly obvious to you in terms of how backward societal thinking has become, as well as, how little curiosity there seems to be when it comes to the art of investing. I understand we live in a world economy of specialization and that everyone is SOOOO BUSY but take a step back and ask yourself when aren't you investing? Whether it be time, money, health, relationships and on and on...
There's a quote that reinforces how important it is in life to explore and discover the very things we know little to nothing about. It goes"Don't limit your challenges, challenge your limits" Anonymous
Did any of that make sense? Was it helpful at all? Should I seek therapy?
As always, there is so much more to learn about ourselves so we can observe the markets to make more sound decisions as investors.
Thoughts? Challenges? Want to learn more? See more? Let's have a quick chat or sign up today risk-free (or keep making the same mistakes so the pros can eat your lunch). It is your CHOICE ----> https://www.principles1.com/plans-pricing