Let’s assume that fifteen minutes of vigorous exercise daily adds three years to your life. Being a money manager is that fifteen minutes.
In short, investing is a discipline. It’s not fun, or sexy; it can be boring…very boring. It takes a similar discipline that exercising takes. To take the stairs instead of the elevator. It’s eating your veggies and forgoing a cheesecake.
You might think otherwise watching the market swings over the past few weeks – particularly the headlines about the money teens have made “playing GameStop.” Did you jump on board the GameStop train with your “stimmy”? How did it feel to engage in speculation?
Below is a chart of the stock price over the past year (3/2/20-3/3/21). The media sure latched onto the money that was made in the one week (1/22/21-1/29/21), but we haven’t heard much about the money that was lost immediately afterward.
Can it be fun to play with an amount you can afford to lose? Absolutely…if you have the interest and time to keep learning. Should people be allowed to make mistakes with their money? Yes, failure can lead to growth.
When we invest, we are looking for two things: First, to seek to make the most of our fifteen minutes of exercise. That is, to take advantage of market growth. And second, to aim to mitigate the risks of the inevitable hurricane that will soak you to the bone and give you a fever (the bear market).
At the end of the day, your investment discipline is more likely to make you rich than buying a lottery ticket, putting your money in Vegas – or getting stock tips from Redditors. And letting your emotions – fear and greed – dictate your decision-making can spell trouble.
Make up your mind to be “the tortoise not the hare” – focus on sustainable, long-term growth. Seek expertise, wisdom, and help. Understand risk and reward. Recognize that fear and greed are key drivers of the stock market. Focus on your values and line your investments up with those values.
When it comes to your money, it’s typically best to heed the old trading wisdom: “The market can remain irrational longer than you can remain solvent.”
If you want to talk more, reach out we’re always here to chat.
And check out our blog where we pose the question: Is Investing the same as gambling?