How Confident Are You With Your Investments?

The more I read about the stock market in books, the more confident I become. Not because I am learning more about trading necessarily, but because they always stress that the patient investor, one that does not let emotions dictate their decisions, will always be more successful in the long run.

I am reminded of Peter Lynch writing about meeting with the top investors in the country, how they can't agree on anything, and there is always a couple that have the opinion that doom day is coming. Meanwhile, others believe it to be a buying opportunity and that market corrections are just a part of the stock market and will always recover.

On that note, I started taking more interest in my portfolio that my broker is handling. He handles the retirement stuff, while I handle the smaller stuff. I like small cap value stocks that have great growth potential. I am looking over his created portfolio for us and something strikes me; the smaller IRA I had from 3 years ago is down 16% and contains an extremely slow growing mutual fund. It appears that it won't stay ahead of the market. On monday I will be calling him to dismiss his services on that one, because they are doing worse than I would. The larger retirement account is doing ok, but it barely ahead of the market.

This gives me even more confidence that even the top brokers are really not all that much better than what YOU can do with a little research and a forum like this.

On a final note, diversification is the biggest thing that will save you from these ups and downs. Some industries are not hit as hard as others during certain events. My portfolio has been built up extremely diversified and think it will weather this storm well.

 

It ain't what you don't know that gets you into trouble. It's what you know for sure that just ain't so.
Mark Twain


If you call it "resource allocation" versus "investing" it makes reallocation much easier...

 

My solace is that if I get crushed, everyone else will be getting crushed around me, so I can still say I did ok ´compared´ to those guys. Investing in the stock market is always the best place to have your money if you are looking at anything longer than a year timeline. I only swing for homers with very small, fun parts of my portfolio, but for the most part, my goal is to just beat the market. If the best way to make money is in the stock market, and you are doing better than average, than that is good enough.