• Create BookmarkCreate Bookmark
  • Create Note or TagCreate Note or Tag
  • PrintPrint
Share this Page URL
Help

Part: 3 Colossal Blunders > Invest to Win and Avoid the Blunders

Chapter 15. Invest to Win and Avoid the Blunders

Investing is not a sport, yet investors frequently behave as if it is a sport. We get carried away in the competition of comparing investment results with others. In short, we want to win. We may even believe that investment success brings respect from others or is a reflection of our character. Our environment contributes to this belief. Financial publications rank the performance of mutual funds. They rank the performance of individual stocks and industries. It all seems to be about being number one. Winners then advertise their success. Investing appears to be some sort of game, and everyone seems to want to win.

As Chapter 1, “Other People's Problems,” discusses, this type of attitude keeps our focus on the short term. How am I doing now? Are my investments outperforming those of others? Unfortunately, this short-term focus leads to the psychological and emotional traps detailed in this book. These traps frequently lead to an investment blunder. Figure 1.1 in Chapter 1 illustrates that the experience of an investment blunder causes serious harm to the investor's wealth and will cause a loss in the real game. The real game is not the fabricated competition between investors. The real game is trying to achieve your financial goals—especially the achievement of a retirement nest egg that will allow you to maintain your standard of living. Do not think of your investments as a vehicle with which to compete against others. This leads to the short-term focus. Instead, think of your investments as a long-term journey. The end is the accumulation of a retirement nest egg in time for your retirement. If you get to the end, you win!


PREVIEW

                                                                          

Not a subscriber?

Start A Free Trial


  
  • Creative Edge
  • Create BookmarkCreate Bookmark
  • Create Note or TagCreate Note or Tag
  • PrintPrint