Fear is a reaction. Courage is a decision – Sir Winston Churchill
The reason why you lose money in the markets…
How many newsletters/newspapers do you read in an attempt to gain an edge in the markets? Of all of your sources of information how many of them truly help you make money? Be honest.
I saw a newsletter this morning that absolutely infuriated me. It was well written and slick looking. The subscription peddler opened up with big Greek words and a parable at the beginning so you knew that the author was smart. He then continued to scare you. Telling you why you shouldn’t be in market. He didn’t hit you on the head with a mallet about this… he was subtle in his placing of fear in you. He predicted a big downturn in the market, but offered no specifics to when. He offered no trigger to this soon to come catastrophic event. The only thing he offered in the beginning paragraph was fear. Then he did what all-good charlatans do… he hid behind the work of someone else. He went on to publish several pages of work that was not his own to support his claims. This way if his big prediction comes true he can claim it. If his predation falls flat he can hide behind the research he quoted.
This type of fear-mongering hucksterism infuriates me. It should infuriate you too. These authors of hype don’t respect you as a reader. They want to control you with fear. They don’t want to teach you how to really make money in the markets. They want to sell you grade “B” research that plays on your emotions. All they seem to care about is the fees they collect from you monthly.
When you respect someone you educate him or her. You don’t scare them. Teach them what you know. Call it naiveté, but I trust you’ll want to become my client because of my knowledge and ability to grow your account. You’ll trust in my defined process. I believe in rules based investing. Hunches are for gamblers – successful investing requires discipline and a defined plan.
You can see my approach and documented record by going to http://noramassetmanagement.com/ click on the philosophy tab and articles tab once on the website.
Back to you….
How many of you consume these hype newsletters that I described above? Do you read them because you agree with the author? This is called confirmation bias. You feel empowered because someone who you think is smart and educated agrees with you. This makes you feel good. So what do you do next? You set up trades / investments that are in tune with your confirmed thought process.
So what happens next? You miss the turn higher in the markets. You’re so worried about a crash that you miss the start of the move – debating with anyone who will listen why this won’t last. I’m betting that many of you missed the move higher in March of 2009 based on fear as well.
Take a look at the charts below of the S&P 500 and NASDAQ. We’ve been in an uptrend since the last week of May. Do you have rules that get you back in or do you let fear-peddlers drive your market decision-making?
You need rules that get you into the market and stocks and rules that get you out. When this uptrend ends and it will end I have a defined exit strategy.
There is comfort in rules and safety in discipline.
Where I placed the arrow is where we re-entered the market in the terms of QQQ and SPY. This also marks the time started to prepare our next two growth stock purchases.
You’ll continue to lose money in the market if you continue to subscribe to fear. You’ll always be reactionary. You may get one right once in awhile. I’m betting that once in awhile isn’t good enough for you. What you crave is consistency and predictability.
Break free of fear…
By defining a process for stocks, bonds and commodities while adding the markets direction I can add a level of predictability and consistency to my portfolio growth. You can do this too. If you want to learn how please join me on Thursday June 26th at 7 PM. I’ll be teaching you two specific strategies that will help you grow your account.
Seating is limited. If you’d like to attend please click this link to RSVP – http://noramassetmanagement.com/workshop/
I hope this helps you!
Best Regards,
Tim
The information presented is for educational and entertainment purposes only. Opinions and information expressed are based upon information considered reliable. However, factors are constantly changing and should not be relied upon. You need to do and verify your own research.
Moreover, no reader or listener should assume that any information or discussion presented serves as personalized investment advice from NorAm Asset Management, Inc. or from any other investment professional, and is not an offer of solicitation for the sale or purchase of any specific securities, investments, or investment strategies. You need to have your own, individual investment advice suitable for your personal situation.
Investments involve risk and unless otherwise stated are not guaranteed.
