The proof we’re looking for doesn’t exist. Rock solid, guaranteed, “won’t fail” proof — does not exist.
As an investor, if we wait to make a decision until we know we’re right, we’re usually making the wrong decision. Successful investors develop ground rules that they stick to and the habit of trusting their instincts.
But they won’t always be right.
That’s a certainty that we need to get used to. Despite insurmountable proof, we won’t always be able to make a decision that is profitable.
That’s because proof is based on history not on reality. Experience and an honest interpretation of results will tell us how we should have made a decision in the past. But it won’t accurately predict how we should make a decision right now.
There are numerous factors that are different now from before. Waiting until we have better timing isn’t always a smart move either.
What do we do?
What should we do when we don’t have the proof we want in order to make a good investment?
1.Stop looking for guarantees. — There are no guarantees in life. The proof we’re looking for doesn’t exist. That “won’t fail” journey we want to walk is just a fantasy in our head. Figuring out the right move starts with a shift in our philosophy. To make the best investments we need to believe that there’s a possibility that whatever our decision, it will be wrong. The odds are 50/50 that we will make a mistake. 2.Be more honest about our weaknesses. — Stop pretending that investors don’t make mistakes. We all do. Sometimes we make big mistakes that incure big losses. Denial impedes profit and increases loss. By acknowledging mistakes we teach our brain to adapt to realistic expectations of success. 3.Take smaller, more recoverable positions. — Instead of lunging boldly into investments that involve luck or fortuitous timing, make decisions that limit uncertainty. Stable long term investments give us the best environment for improving on decisions that we’ve made in the past that might not have been the best choice at the time. By taking tiny steps forward all the time, we limit the number of times we need to dramatically change course. That means there’s less drama, chaos, frustration and loss involved.
Making good investments require another set of skills.
It requires investors to be curious and to try to interpret the available clues.
The better we are at looking for answers and finding answers from what we see around us, the better we will be at making good investments. Especially when we don’t have enough information.
If we want to know, we should probably start looking for answers. That’s where great decision start. With us looking to do the right thing.
The evidence we need to make a good investment is all around us.
Look for answers. Interpret clues honestly. Take steps toward where we want to be.
The only guarantee in life is that if we keep moving In the right direction, we will get closer to where we want to be. If we keep moving in the wrong direction, we will get further from where we want to be...
gla MT
THR Price at posting:
0.5¢ Sentiment: Hold Disclosure: Held
