Hope you celebrating? Festival mood has set in….
Really it’s time to celebrate… year long we continue to chase our dreams, passions, goals, deals & numbers. But the festival is the time when you should and will chase your loving ones, friends, and people you care actually in life. So it’s time to pause what you have been doing and now just be your self and… celebrate … have fun.
… and my entire team at TheWealthWishers is waving at you … Happy Dussehra Folks… and have a cheerful start to the festival season.
We always look Ravana with 10 heads and each of these 10 heads represents something. The Pessimists say these were Ravana’s ten negative factors or emotions that lead to his demise.
The optimists say that Ravana was a skilled person with these ten qualities a man should possess. A successful person needs these 10 qualities and a mind to balance these.
In investing also we have some constant qualities. These are constant because THEY NEVER CHANGE.
And with these 10 constants, one requires a cool-understanding-balanced mind to apply these constants when they are required.
These 10 wise constants in investing are:
1) Every time is different. Forecasting is Foolishness. Forecasters have some motive of their own. Diversification is the best protection against our inability to predict the future.
2) The longer the holding period, the higher the odds of success. Market forces are determined to curtail your holding period.
3) Cycle Exist, Trends Exit. We call them history repeating but it always has new elements of surprise.
4) Concentration is the fastest way to build wealth and the fastest way to destroy it. Asset Allocation is mandatory.
5) There is no reward without risk. So risk should be welcomed as there will be no returns in the risk-free zone. There is more reward if more risk is taken. But it does not mean you drop in a war zone without training & armour.
6) Time is more valuable than money. Same way savings is more valuable than investing. If it seems too good to be true, it is.
7) Simple beats complex on average. Inactivity beats higher frequency on average. If passive beats active, I will choose the passive form of investing. Lower fee beats higher fee on average.
8) The only certainty is uncertainty. Volatility is mean-reverting. A natural way to burst bubbles & control insane price rises and falls.
9) Controlling your emotions is the most important thing. Ego is the enemy. Greed is the enemy. Fear is the enemy. All else is never equal.
10) No one rings a bell at the top or bottom. So the best way is to participate with goals. No Goals-No Investments. A strategy you can stick with is the only strategy that matters.
So instead of 10 heads to cut, I pray you wear the above 10 heads from today.
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