Stop caring about things that don’t matter.
Happy Mother’s Day to all of the wonderful moms out there. After we woke up at the crack of dawn to watch an 8u travel baseball game we enjoyed a quiet day at home which was perfect!
As the family lay around, I was reading an article about Bill and Melinda Gate’s getting divorced, and the top financial tips for them during the divorce proceedings. Yes, someone wrote an article to give financial advice to billionaires. I had to read it, and as most of the information was incorrect, I began to wonder, how many people are paying attention to stuff like this. Do people read this and think, “well if its good advice for billionaires, it must be good for me?” Then I started to think about all the stuff that investors talk about, and care about, that they shouldn’t. So I made a list of things you should stop caring about when it comes to investing. I love a good list!
Any advice from super rich people
I feel like this is a no brainer. Often times super successful and wealthy people offer up the absolute worst financial advice. They mean well, but once you have a billion dollars you tend to simply become too out of touch with normal people to actually give good advice.
They also rarely follow their own advice, and have the ability to make huge financial mistakes with their wealth and still be okay. You and I don’t have that luxury.
Your IQ, or my IQ
EQ. That’s what matters. Not IQ. Warren Buffet once said “Investing is not a game where the guy with the 160 IQ beats the guy with the 130 IQ. Once you have ordinary intelligence, what you need is the temperament to control the urges that get other people into trouble in investing.”
Investing is a soft skill, not a hard science. Your behavior matters much more than your intelligence. Controlling your actions and reactions matters the most.
Short Term Performance (1 year or less)
One year, or really any short-term time frame doesn’t really mean anything. It is not an indication of who you are as an investor, because everyone will have a good or a bad year. Diversification looks down right stupid in the short term, 2020 is a perfect example. How come we didn’t just put all our money into FAANG+MSFT?.
Long term returns are all that matter.
Watching CNBC infuriates me sometimes. One of the graphics that is paraded onto the screen constantly, is what $10K would have grown to if you had put it into XYZ investment that is now up 10,000%. Great, thanks a whole bunch for letting me know, maybe next time, tell me BEFORE it happens.
How come they don’t tell me that if I had put my $10K into Lehman Brothers I would have $0?
This exercise serves no purpose but to make you feel bad. Don’t do that, remember you rock!
So how does this impact all of you?
-Focus on the things you can control
-Stop focusing on the things that don’t matter
Stock market calendar this week:
Wednesday May 12th:
Core CPI @ 8:30AM
Thursday May 13th:
Initial and continuing Jobless Claims @ 8:30AM
Friday May 14th:
April Retail Sales and April Retail Sales ex-autos @ 8:30AM
Most anticipated earnings for this week