|September 9, 2009|
"Everybody wants to go to heaven, nobody wants to die"
This quote, attributed to the boxer Joe Louis, has a corollary in the investment world: Everyone wants to be make money – but few people are willing to invest in their financial education.
They read reports generated by investment banks. They listen to their brokers. But they don't take the time to find in-depth, reliable investment advice.
And why not?
There is a wonderful story about an old dog that lay stretched out on the porch of a country general store, moaning and growling as he lay half asleep in the sun.
"Why is your dog making all those noises?" a customer asked the store owner.
"Oh," answered the owner, "he's lying on a nail."
"Well then," said the customer, "why doesn't he move?"
"Because," said the owner, "it's not hurting him bad enough."
Daniel Johnston, in his book Lessons in Living, calls this condition "comfortable misery." It means you're miserable, but you're used to it and can tolerate it.
That's the condition many investors find themselves in today. They are hurting but they are not, apparently, hurting enough to change.
Jon Herring tells me that a significant number of IDE readers don't subscribe to a single IDE newsletter. They are content, it seems, to read our views on the economy but they aren't ready to start taking advantage of our investment advice.
If you want meaningful change in your life, you must take responsibility for the situation you find yourself in and then take action to change things.
A recent conversation with a friend of mine might shed some light on the subject. He said that he has "been meaning" to start investing again, but he just can't seem to get himself moving.
The old "meaning to." Consider this ditty by an anonymous poet.
Maybe you're still licking your wounds?
Many investors are stuck in grief, mourning their bear market losses and waiting for a signal to buy. Others are kicking themselves for missing the rally that began in March.
And all the while, IDE's private services have been racking up profits left and right.
No matter what happens in the markets, there is always money to be made by those who are prepared and willing to take intelligent risk.
I once saw an interesting psychological study about the "seven stages of grief" that people go through when dealing with the loss of a loved one. I've adapted it for investors.
If you find yourself mourning your investments, you might be interested in pinpointing what stage you are in...
Where are you on this grief continuum? Figure that out and then make a commitment to get back on track.
If you have a perspective longer than the next few years, here are six reasons why I believe now is the best time of your life to begin investing again.
Steve Sjuggerud is one of the world's most widely read investment newsletter writers. He agrees with this longer-term bullish perspective…
In a recent issue of his newsletter, True Wealth, Steve writes, "Stocks just went through their worst 10-year period in history. Every losing 10-year period has been followed by an exceptional 10-year period."
That's good to know, if you're a long-term investor. "You don't want to buy in 1999 after the greatest 10 years in history. You want to buy in 2009, after the worst 10 years in history."
By no means are we suggesting that you go "all-in" right now. The market has just made a historical run to the upside. A pullback – possibly a sharp one – is likely. But that shouldn't scare you. It should excite you, because values – once again – will abound.
Avoid the weaker names. Be highly selective in the stocks you buy and average into your positions over time. Use trailing stops to protect your gains. And be ready to pounce when values present themselves – 10 years from now, you will be very glad you did.
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