HAVING THE PROPER INVESTING MINDSET

It's All About Your Strategy and Your Process

Most of us are doomed from the start regarding investing and managing money. We develop unusual attitudes towards money from a very young age. We receive lots of conflicting messages about money and investing. These mixed messages create unhealthy and inappropriate investing mindsets. If we fail to straighten out this confusion, we are not able to develop healthy approaches and strategies for managing our money. With the proper mindset, investing is more successful and more enjoyable.

Here is a sampling of the variety of messages we all receive about money and investing:

• “Your Uncle Joe bought Amazon for $5 a share in the late 90’s and made a fortune. He bought his vacation home with the profits.”

• “Our grandfather lost everything in the stock market crash of 1929. The family barely survived the Great Depression.”

• “Audrey makes a lot of money in the stock market. She is investing heavily in lithium battery stocks right now.”

• “My friend lost $200,000 this year when Tesla’s stock tanked. He won’t be able to retire now until he is 70.”

• “Sally is making $5,000 per week by day trading. She took an online course, and it changed her life.”

• “I’m just not lucky in the stock market.”

You could substitute your own similar stories. Whether the investing stories we hear are true or not, they end up shaping the way we approach investing. And we may not even be aware of it because many of our investing beliefs get lodged in our subconscious minds. These stories and the emotions surrounding them often lead to the following investing mistakes:

• Approaching stock market investing as a “get-rich-quick” scheme.

• Focusing on short-term results vs. long-term results.

• Listening to stock tips.

• Using emotions and not data in your investing decisions.

• Chasing “hot” funds or stocks.

• Celebrating your winners and ignoring your losers.

• Believing in luck and thinking of investing as gambling.

• Taking on too much risk.

If you want to be a better investor, you need to start by addressing your beliefs and your mindset about investing. How many of the items listed above apply to you? Are you an emotional or a disciplined investor? Do you have realistic expectations from the stock market? Take some time this week and examine your inner beliefs about investing. Examine your mindset and your expectations from investing. If you can find some mistaken investing beliefs, work on challenging them.

The best investors are not gamblers. The best investors use knowledge and data to their advantage. The best investors are disciplined and not emotional. The best investors have a solid strategy, and they stick with it. The best investors don’t chase fads and trends. Here are some ways that good investors approach investing:

• They view investing as a “get-rich-slow” process. They take the long view, and focus on 10-year, 20-year, and 30-year+ returns.

• They are patient and they don’t overreact to short-term surprises in the market.

• They take luck out of the equation and use long-term trends and probabilities to their advantage.

• They know that they will make roughly 10% per year by simply investing in indexes that track the S&P 500 and the Nasdaq. They understand that compounding returns at this rate leads to incredible asset growth.

• They don’t pay attention to stock tips from any source.

• They don’t get thrown off when they hear of someone making a killing on a particular stock.

• They don’t pay attention the what the experts are forecasting for the market or the economy because they know they are wrong most of the time.

Your results will be better if you emulate the best investors. Your attitude will be better. Your life will be better.

“Buy & Hold” investing is disciplined in this way. Our Beyond Buy & Hold system is an improvement over traditional Buy & Hold investing but it is built upon the same solid foundation of this long-term disciplined approach. Our Beyond Buy & Hold system starts with the Buy & Hold foundation that produces 10% annual returns by simply investing in S&P and Nasdaq index funds and improves upon that solid foundation. Our system takes the best of Buy & Hold investing and eliminates the worst parts of Buy & Hold investing.

Happy investing,

Phil

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Disclaimers The Beyond Buy & Hold newsletter is published and provided for informational and entertainment purposes only. We are not advising, and will not advise you personally, concerning the nature, potential, value, or suitability of any particular security, portfolio of securities, transaction, investment strategy or other matter. Beyond Buy & Hold recommends you consult a licensed or registered professional before making any investment decision.

Investing in the financial products discussed in the Newsletter involves risk. Trading in such securities can result in immediate and substantial losses of the capital invested. Past performance is not necessarily indicative of future results. Actual results will vary widely given a variety of factors such as experience, skill, risk mitigation practices, and market dynamics.