19 Beliefs for Successful Investing to Survive & Thrive During the Global Financial Reset
- Capital Preservation as the primary objective
- A financial rate of return sufficient to keep pace with the real rate of inflation (8%).
- Expectations based on realistic objectives. (The market does not compound at 8%, 6% or 4%)
- Realizing that higher rates of return require an exponential increase in the underlying risk profile. This tends to not work out well.
- You can replace lost capital – but you can never replace lost time. Time is the most precious commodity in investing that you cannot afford to waste.
- All portfolios regardless of their asset allocation strategies are time-frame specific. If you have a 5-years to retirement but build a portfolio with a 20-year time horizon (taking on more risk) the results will likely be disastrous.
- Forward market returns likely to be lower and more volatile than what was witnessed in the 1980-90s.
- Controlling risk, reducing emotional investment blunders, and limiting the destruction of investment capital, will be the real formula for investment success in the decade ahead.
- Investing is not a competition. There are no prizes for winning but there are severe penalties for losing.
- Emotions have no place in investing! You are generally better off doing the opposite of what you “feel” you should be doing.
- The ONLY investments that you can “buy and hold” are precious metals or those that provide an income stream with a return of principal function.
- Market valuations (except at extremes) are very poor market timing devices.
- Fundamentals and Economics drive long-term investment decisions – “Greed and Fear” drive short-term trading. Knowing what type of investor you essentially determine the basis of your strategy.
- “Market timing” is impossible– managing exposure to risk is both logical and possible.
- Investment is about discipline and patience. Lacking either one can be destructive to your investment goals.
- There is no value in daily media commentary– turn off the television and save yourself the mental capital.
- Investing is no different than gambling– both are “guesses” about future outcomes based on probabilities. The winner is the one who knows when to “fold” and when to go “all in”.
- No investment strategy works all the time. The trick is knowing the difference between a flawed investment strategy and one that is temporarily out of favor with mainstream financial experts.
- The goal is neither to be bullish or bearish in outlook, but rather committed to viewing the world through the lens of probabilities.
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