Where Are You Going?
We can all get from where we are to where we want to be, assuming we know where we are going. It sounds crazy to think we would get in a car and start driving without knowing our destination. Yet, many investors put money into stocks, mutual funds, ETFs, bonds, etc. and have no clue where they are going. Investing takes planning just like taking a trip in you car. If you don’t know where you are going, how will you know when you have arrived?
I know this sounds old school and you want to read my notes to get some insight in how to make money. You will, if you understand that making money for the sake of making money is akin to the processionary caterpillar. If you line them up end to end in a circle, they will march until they die, because they follow each other without reason. Making money, from my view, must have a why, or the how keeps changing. Simply put, why are you investing? What is the goal? Or - Where are you going? If I need to have $3000 per month to retire, I can now build my portfolio accordingly. I can define where I am going, thus I can invest my money with confidence of accomplishing the objective.
I bring this up, because over the last week, discussing the market with investors has brought to light that we are more interested catching the next uptrend than knowing why we are trying to catch it. Like you, I am interested in making money. But, I have college education to pay for, retirement to fund, a travel budget (my wife), new car to purchase, and…. the list goes on. In other words the return on investment is motivated by the why. I don’t need to be in the hall of fame for making the most money in a 12 month period. I need to have the lifestyle I want. Simple enough!
Here is my advised to you, invest understanding the why and you will become a better investor. Attach a goal to the investment process and your exit strategy will define itself. The beauty of this is you are the one who gets to set the goal! You are the one who defines the parameters, not someone else. For example, there is a particular charity I support and believe does exceptional work. One of my goals is to find a stock that goes up 2000% and gift the stock to them. They benefit from the gift, I benefit from giving and the government gets nothing. I call that win-win-win!
Take the time today to define the why behind your portfolio and the positions within. Entry, Exit & Target are defined by the why and the strategy for getting there.
Later today I will post more on the markets and the outlook for today.
Have a great investment day!
