I have given much thought about investing in general and my own personal investing and where I have made mistakes and failed over the years. It is not easy to admit my mistakes and some have been costly. The most costly for me has been going from one fad to another. If I had done nothing, I would have been better off. Trading costs eat up your returns. Picking individual stocks are much harder than it appears. I can see where most investors can go wrong.
The one thing I did do right is to begin investing in a vanilla S&P 500 mutual fund for my grandchildren. I began in 2001 in the heart of the bear market and added to the accounts each month. I still add to their accounts and will do so until they are 18 years old. I was astounded how much the accounts have grown over the years and this includes the 2008 meltdown. Nothing fancy. Just matching the market and not trying to beat it. That is the lesson for me-simplicity and humility when it come to investing.
I would like to think I'm smarter than the other investors out there-but I'm not. It's not just intellect-it's mastering your emotions when the market starts to plummet. It's having a plan and being disciplined and executing the plan when market conditions are tough.
It has taken me decades to finally understand the emotional aspect of investing. Devise a plan that makes sense to you and stay disciplined. It doesn't matter if Investor X is making 5% more than you this year. Don't get sidetracked. Master your emotions and greed when they are doing better than you. It's important to cross the finish line.
Michael
Where investors fail...
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Professor Disorientation
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MachineGhost
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Re: Where investors fail...
Well said!
The worst period of time when including dividends and accounting for inflation was the 12 year long drawdown until breakeven from 1973. Yes, that was worse than even the Great Depression which had you back to breakeven in just 2.5 years (think of the eye popping yields and negative inflation).
So that's really all you need to worry about. The PP deals with it. Dollar cost average and you're fine.
The worst period of time when including dividends and accounting for inflation was the 12 year long drawdown until breakeven from 1973. Yes, that was worse than even the Great Depression which had you back to breakeven in just 2.5 years (think of the eye popping yields and negative inflation).
So that's really all you need to worry about. The PP deals with it. Dollar cost average and you're fine.
"All generous minds have a horror of what are commonly called 'Facts'. They are the brute beasts of the intellectual domain." -- Thomas Hobbes
Disclaimer: I am not a broker, dealer, investment advisor, physician, theologian or prophet. I should not be considered as legally permitted to render such advice!
Disclaimer: I am not a broker, dealer, investment advisor, physician, theologian or prophet. I should not be considered as legally permitted to render such advice!