If You Follow the Herd, You Will Get Slaughtered….
We are constantly hearing and reading the next great idea to make money. How to invest in stocks or gold or index annuities or real estate or commodities or future contracts etc, etc….. and realize enormous profits with no risk or work. We all hope these claims are real. Unfortunately, these claims end up with very disappointing results.
If an investment strategy is on the cover of every magazine, and all of your friends and associates are doing it, it’s reckless to follow suit. Only hot, sexy, and speculative techniques make the cover. Don’t follow your friends!
Investors, who are truly investors and not speculators, do not need to know everything about investing. They just need to know the right things. One of those concepts is to own equities….globally diversify….rebalance. This is very simple, however for most people they are very difficult to follow on their own. The media and our emotions get in the way. We are very likely to panic on our own. We need the help of like minded people to guide us through the tough times.
I have been accused of writing each week about the same subject with different angles. Well these people are right. Investing for a long term financial goal is about determining your investment philosophy, developing a prudent portfolio based on that philosophy. And to remain disciplined to that strategy.
The Wall Street bullies want you to believe that they have the right investments or strategy at all times. These bullies want you to believe they can show how and when to invest your money. Remember these bullies make money when money moves from one investment to another. Their profits are the number one concern, not your profits.
Don’t empower them.
It should be noted that no strategy works all the time. However, if you stick to YOUR strategy you will succeed over the long term.