Winning the Loser’s Game

When everyone's jumping into something / anything, it's probably a really good time to move in the other direction.

I read an interesting article this morning at the Wealth of Common Sense Blog, regarding Charles Ellis. In it, Ellis explains how the investment world is a lot like the sport of tennis.

To quote:

The best players in the world hit enough solid shots until their opponent finally makes a mistake (the winner's game). On the other hand, amateur tennis players tend to lose points because they make basic mistakes and unforced errors (the loser's game).

Simply cutting down on unforced errors and reducing mistakes can help you become a better investor.

Things Could Be Getting Ugly Real Soon

Hopefully, all my yapping these past few weeks have been answered in the past 2 days of market downswing and volatility. Not that I'm out there yelling "I told you so," but I do hope a few readers of this blog are protecting their capital using the right money managers, and possibly using life insurance strategies, at a minimum, to preserve the growth they've been getting. If not, the next few months of summer might be a painful season. Time to whip out the sunscreen.

stock board wall of red

To continue the thought:

The problem is that many in the industry haven’t figured this out yet. Since most average investors don’t understand investments or the financial markets, many get caught up in listening to the first intelligent-sounding piece of advice they stumble across.

They assume picking stocks or paying attention to economic data is the key to investing and miss out on all of the basics of this so-called values discovery.

Avoid The Brainwash

Over the past few days, I've heard financial analyst after analyst suggest it's a perfect time to get into the market, now that things are moving forward like a steamroller. These people are shills for news agencies. Ignore them with force.

Here's an Obvious Thought

Unless you haven't been paying attention, when everyone else is jumping into something / anything, it's probably a really good time to move in the other direction.

The market may continue to fluctuate like it does most summers (a typically volatile season), or it may not. History tends to show you what will happen again. The market loves predictability. It thrives on it.

Read the rest of the article here.

Blessings on this Friday.

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