Why Being a Long Term Investor is Dangerous?
Goal Discuss how strategy plays a great deal in success
Although I discuss investing in this article, this article has minimum amount to do with investing. Money is just a great example.
Let’s start with money.
Imagine we are having a conversation about investing and I ask you what kind of an investor you are. You quickly regurgitate that you are a long term investor.
When I ask you what that means you shrug your shoulders or at best repeat what you have heard from financial industry. In other words you can not define it precisely but you state something to the effect that you pick your investment and stick with them through cycles.
Let us compare that with the following story…
You and you partner are newly weds. You look at your partner and tell them that you are a long term investor. Your marriage is your investment. You love them BUT for the next 30 years will not tell that you love them or hug them. You will be with them and by their side BUT no lovey dovey words for you. You are a serious long term investor. BUT 30 years from now you inform them that you will start telling them that you love them and will worship the ground that they walk on.
How long do you think your partner will stay with you?
Money and anything worthwhile needs continuous attention. You can’t just get it started and then forget it. This is rare.
What about residual income?
Residual income is great BUT you still need to touch it.
Imagine writing a book. It is rare that a few years later you will be selling any copies. If you “touch it” by editing it and maybe adding to it, you can re-issue it and start the process again.
Should you be an active trader instead?
I believe that it is very hard to make money being an active trader. It is so easy to jump in and out of positions that doing it successfully for a long time is rare.
From a love perspective that could be like smothering someone with love. If you are constantly hugging and kissing the other person and being needy that will get old too.
So what do we learn?
Ignoring an issue and hoping that it will change is not a good strategy. Putting force behind it also does not work. We need to balance our actions and inactions.
What does that look like?
As an investor you should pick your strategy and weekly check where you are. If there is a 10% change in your position then you need to accept that your strategy was wrong and remove the position. Very hard to do because emotions get in the way.
For relationships this is giving your partner attention daily BUT weekly you give them special attention. Make that special attention event spontaneous and something that requires effort. It could be flowers, a date, something meaningful to both of you.
What does that mean?
Small daily actions with larger weekly ACTIONS is the compromise in love money, and time management. It describes the behavior of an engaged investor. It describes the strategy that you are paying attention without being overly engaged.
My two cents….(this is what I earned from Medium.com in October 2020)
I got to go…my future self alarm went off
Robert Trajkovski is professional with experience in leading people and projects in Steel/ Power, Refining, Chemicals, Industrial Gasses, Software, Consulting and Academia. He has worked for both owners and engineering companies. In addition, he has instructed 73+ courses at several institutions and often offers his courses for free on LinkedIn.
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