In the back of your mind, without even consciously trying to figure it all out, you probably get it. Most people actually get lost subsequently trying to get "meaning" consciously - looking for the meaning.
Like I said, making money is about two decisions only. They are: Buy it? Or Sell it? That's it.
Take the whole fiscal cliff trap - and how you're supposed to invest under present circumstances...
We all knew the fiscal cliff was coming. And we all know that they didn't fix anything. They've just kicked the can down the road again. So what does that mean for the markets?
Buy or sell?
It doesn't matter. Or, at least it shouldn't matter. Why? Because nothing has happened so there's nothing to do. If you're invested, don't complicate things. Don't look for any meaning in any of this.
Here's how I untangled all the meaning I tried to interpret from all of the things that were happening this past summer.
First, I stopped trying to look for meaning where there was none.
Second, I looked for what I knew and hung my hat on that.
The Fed was doing more quantitative easing, keeping interest rates low, and stuffing the banks with money. There's no looking for meaning in that. You could look at what that means for the state of the economy, or the state of banks, but that's too much looking for meaning.
The Fed easing means markets are probably going to go higher, or at least the Fed is going to provide a backstop. That means buy, not sell.
So, this summer, in both my investment newsletters, we bought high-yielding, high-paying dividend stocks for income that we weren't going to get anywhere else. And we took several positions that made sense because they diversified our portfolios.
We didn't sell anything going into the year-end with all the fiscal cliff talk about what it would mean. We did buy some portfolio insurance, which was simply a buy decision.
And here we are today. We rode out the fiscal cliff because we didn't know what any of it meant. So it all got reduced to "do we buy or sell?"
That's what we did. We bought some downside protection and had stops in place on all our positions in case the meaning of going over the fiscal cliff was: SELL.
That's it, it is just that simple.
I've made money in the markets every year for some 30 years - in spite of the fact that I look at what things mean (after all, I'm only human). For me and for you, making money has to do with only two decisions. Personally, I don't put a lot of meaning on either of them.
If I buy and I'm wrong, the only meaning that has is that I made a bad decision. I fix that by making another decision. It's not hard.
If you want to make money, make decisions. Stop looking for meaning and make buy and sell decisions based on whether you are making money or not.
Related Articles and News:
Source: http://moneymorning.com/2013/01/09/an-idiots-guide-to-investing/
Samantha Steele Espn goog Sylvia Kristel st louis cardinals Steelers Schedule tory burch Al Smith Dinner
No comments:
Post a Comment
Note: Only a member of this blog may post a comment.