Friday, February 3, 2012

These Are Good For Investing Too

A friend posted a link on Facebook from MSN titled 11 Health Habits That Will Help You Live to 100. Quite a few of them can apply to investing as well. An ongoing theme on this site has been that it is guaranteed that there will be years that the stock market will go down. Based on history this will happen 25-30% of the time but either way, in the future there will be down years.

It is also guaranteed that there will be years that we will lag behind whatever the market does. Both of these are guaranteed and if you have any time behind you investing you have already gone through both of these and you've lived to tell the tale.

The tie in to the article is point number 7 which is to be less neurotic. Right here, right now while it is easy to be rational if you know head of time that the market is going to have a down year occasionally and that you will not always beat the market and both have happened to you before then there should be less of an emotional reaction when it happens. This should also make it easier to stay disciplined to whatever your strategy is.

The other point that can tie in directly was point number 1 which was don't retire. The connection made in the article is the observed tendency for people to become less active once they do retire. This is well covered ground here for several different reasons with the most practical reason being that for many people stopping work altogether will not be an option for financial reasons. Working less is very plausible and I think my belief in spending time figuring a way to monetize something you love doing is also plausible.

Obviously a thread like this on a blog is going to be greatly influenced by the blogger's priorities in life. Anyone reading this site for a while probably has a sense of what my priorities are and things in the article relate for the most part. Portfolio success and financial success is much easier to achieve when you have your priorities sorted out. When your life priorities are sorted out then you have a better chance of managing your portfolio for what you actually need not what you think you need.

Source: http://randomroger.blogspot.com/2012/02/these-are-good-for-investing-too.html

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