The Art of Disciplined Investing
Often the least sexy advice is the right advice. It’s not exciting, but it will accomplish your goals. This goes for investing, too. Think of your portfolio as a farm. You’ll have good years and bad years, but if you focus on the important parts and don’t let yourself get distracted, you’ll reap the rewards when the time comes. Just like farming, we don’t know which cornstalk will grow the tallest, or which will be hit hard by insects. We don’t even know how the weather will affect the crops throughout the year. There is risk involved. Again, it’s not sexy risk, but it is risk nonetheless. Investing means taking some degree of risk. Accept it and calibrate it to your comfortable level. Why are Investors Rewarded? Disciplined investing is rewarded by the financial markets because capitalism, by and large, works. For investors to put their capital at risk, there needs to be a commensurate expected return. This is finance. Everything else is just details. Investors are rewarded for taking risks. That means that sometimes that return doesn’t appear. In fact, if you look at the equity premium, or the returns stocks minus the returns of short term US Treasury bills, […]

Source: Retirement Researcher

The Art of Disciplined Investing

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