With the help of real-time market coverage, social media and the news, it has never been easier to pay attention to the markets, economy, individual companies or your own portfolio. Gone are the days of receiving monthly paper statements via snail mail — we now watch the market changes instantaneously.
With that being said, it’s more important than ever to filter out the stuff you shouldn’t care about as an investor. Here is a list of 10 things that fit the bill, written by Ben Carlson for A Wealth of Common Sense.
- How rich other people are getting. While it may be easier said than done, not worrying about how much money other people are making can save you a lot of unnecessary stress and angst.
- What you paid for an investment. Picking stocks is harder than you think. Buy and hold is a terrific strategy for some stocks. For others, it’s the equivalent of an investor death sentence. Thinking “I’ll just wait until I breakeven” is a tough place to be as an investor because some stocks don’t come back.
- The amount of time and effort you put into your investments. In many areas of life, trying harder leads to better results. That’s not always the case when it comes to investing. In fact, trying harder and paying more attention to your investments will often lead to worse results.
- One year performance numbers. You’re probably not as good or bad as your short-term performance numbers suggest. Long-term returns matter much more.
- Your IQ. EQ matters more than IQ when investing — there are plenty of intelligent people involved with the markets but not nearly as many who have control over their reactions.
- Financial advice from billionaires. Ultra-successful people typically offer some of the worst financial advice. They are out of touch with normal life, and have the ability to make huge financial mistakes and still have wealth.
- How much you could have made if you would have only put in more… These fantasies serve no purpose unless you know how to spot them ahead of time.
- Success in other areas of your life. The worst investors are often those who assume success in their career automatically translates to success in investing in the markets. It doesn’t work like that.
- Timing the market perfectly. The perfect entry point is only known with the benefit of hindsight.
- Producing alpha in your portfolio. The whole point of investing in the first place is achieving your financial goals, not beating the market.
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