Let Experience Guide Your Investments—Not Emotion
When you invest, it’s easy to get drawn to the many options, sectors, and strategies available. Wall Street and other financial players know this. They come up with new tricks every day. Their main goal is to get into your pocket.
Luckily, stable investment strategies have been effective for many years. This includes the time since the first corporations were created. We can look at such long-run performance to know where we should invest going forward.
Steady Performance History
Company ownership has always produced stable and higher long-term returns. Company lending provides a steady income source. By combining stocks and bonds, we can build a strategy that has a long, stable history.
But, we can’t predict which companies will succeed or fail. However we can gather a lot of them cheaply using mutual funds and ETFs. This diversified approach allows the big winners to outweigh the big losers.
The Investment Experience: I Dare You to Be Boring!
If we believe in the world’s continued growth, we need:
- Patience to see value come forward over time.
- Discipline to stick to our long-term risk structure during downturns.
With these qualities, we can use the markets to achieve wealth.
Successful investors understand this. They often take a “boring” approach, so we don’t hear much from them. They have no exciting stories for cocktail parties. Instead, they focus on building wealth by staying invested through market downturns. This allows them to enjoy the market growth that follows.
Walk Away from the Craze
Chasing the latest strategy or financial product can lead to losses. Very few people become rich by bouncing from fad to fad.
In other words, you don’t have to experience everything directly. You can learn from others' experiences. The boring upward trend of stock market growth can be a powerful force in your financial plan.
So, what do you think?
- When it comes to your portfolio, are you looking for a quick “win,” or do you take a longer-term view?
- How does it feel to see your portfolio as a way to reach long-term goals?
- Or do you view it more like a quarterly report on your investing skills?