One of the notions I come across in conversations regarding the game of investing is the fear of making mistakes due to missing out(lack of action) or not waiting long enough(lack of patience). Bear in mind, we’re not talking about seasoned investment professionals(including myself). Oftentimes, this person is like many other hard-working individuals just trying to build something for the future. For the most part, that fear is completely unfounded as it generally stems from a person’s desire to invest or speculate outside of their competence levels. Why do people do that? Greed? Idiocy? Hubris? Ignorance? Naiveté? Who knows, but it definitely occurs on a daily basis with the retail set.
Two qualities that help to destroy the fear are knowledge and experience. With a healthy foundation of knowledge laid comes confidence. When combined with practical experience, one gets that level of seasoning that can lead to consistent investment success whether one is a pro or amateur. You may be thinking to yourself, “But I don’t have an MBA in finance from Wharton.” So what. Neither do a lot of successful professional investors. You going to work on Wall St.? No? Then who cares. There’s an endless supply of readily available books on everything one needs to at least complete the knowledge-half of the equation to start gaining investment confidence. The experience-half of the equation simply comes with practice, which obviously comes with time and repetition. Do you care enough about your financial future to put in the requisite time?
It all starts with one book, and if you really catch the bug, then it’ll turn into dozens or hundreds as you endeavor to consume as much information as possible to round out your self-education. Feel free to visit the MarginRich Books & Educational Content link at the top of the page(or click here if you suffer from acute wrist fatigue) to see some of the books that had the most positive influence on my own investing or speculating abilities. One can argue that there are better books or I should have read more economics or history or whatever. That’s true, but based on the population of books I have read so far, these had the most impact. When combined with regular perusal of relevant sites on the WWW, one can begin to reach that comfort level with taking appropriate action at the appropriate time based on a quality base of knowledge. Obviously, it’s my opinion that the list of links in Some Favorites off to the side or at the bottom on a mobile device, is a great place to start for web sources of relevant market information.
It is my experience that most people are simply too lazy to take the time to read or research. That’s why they listen to their Fidelity 401k advisor or their 2-bit Schwab financial advisor and wonder why they get average returns. It’s certainly true that just passively indexing in the recent past would have blown away many “complex” strategies, but any real downside protection is effectively eliminated in a down-move bust of the regular market cycle. Strategies really come down to timelines, so whether your horizon is way out or just ahead, it pays to be financially educated enough to truly take matters into your own hands. Building the foundation of knowledge and continuing to add to it will allow one to see value when it truly exists or determine extreme levels when potential outcomes are stretched; hence the tagline at the bottom of all the missives of “Read, Read, and Read some more.”
And let’s not forget the blue-blooded, Ivy League knuckleheads, allegedly the most educated financial professionals on the planet, that virtually blew up the whole system. I’ll never be convinced that it takes their magical, special sort of smarts to run a billion-dollar portfolio for an elite bank or large-scale insurance company and idiotically allow an excessive amount of funds to be gambled in the complex universe of the most esoteric derivatives all over the counter without any central clearing or oversight what so ever to potential worldwide ramifications. GTFOH with that! These fools almost blew it all up once, and you can be sure, the next time they’ll succeed…but life will go on and markets will continue to exist. Pick up a book you’ve been meaning to read and start perusing it. Whether it’s about investing or economics or history or anything, as long as it’s going to positively impact your overall investment skill set. Just…
Read, Read, and Read some more. Good luck out there.
That’s a great collection of books, some of my favourites are in there and I have to admit a lot I haven’t read. I should try and read a few more it seems. Have you read them all?
Yes sir, JB. Indeed, I have read them all except I’m only halfway through Quigley’s biggie.
Does it count as being lazy if I do no research and just listen to you? You guarantee returns?
Ha! Nice one, but you know the answers are absolutely and see disclaimer. Everyone’s a wise-acre.