Worrying only makes you a bad investor! Here’s what you should do instead… [Wednesdays: The Independent Investor]
Miles Everson’s Business Builder Daily speaks to the heart of what great marketers, business leaders, and other professionals need to succeed in advertising, communications, managing their investments, career strategy, and more.
A Note from Miles Everson:
Investing is an important activity that we must learn regardless of our careers. This is one of the vehicles that will help us achieve true financial freedom.
Professor Joel Litman, a friend and colleague of mine, is a great investment strategist. I personally like and appreciate his insights because it produces positive results.
Another thing I admire about him is how he values his overall health. He likes exercising, meditating, intermittent fasting, and anything else that helps him become stronger and healthier.
Do you know he has an interesting health insight that you can also apply in your investment strategies? He wrote about it in a past “Altimetry Daily Authority” article.
Continue reading to know more about that particular advice. We’ll be talking about that article in today’s newsletter so you can use Professor Litman’s tip in your financial decision-making.
The Independent Investor
Professor Joel Litman, Chairman and CEO of Valens Research and Chief Investment Strategist at Altimetry Financial Research, says it’s good to reflect on the past and the future every once in a while.
He believes a new year is always a good time to review the past year and make some forecasts for the coming year. However, he balances those forecasts by reminding himself that he can’t control the future.
He doesn’t know for sure what the future holds—nobody does! He says he can only make educated guesses and focus on the things that can help him achieve his desired outcome.
Let’s take a look at how he demonstrates this in the area of his physical health…
While Professor Litman hopes to remain strong and healthy this year, he also acknowledges the fact that he can’t control what will actually happen to his health.
Despite knowing these things, he believes he can still form healthy habits in the here and now. He can still monitor what he eats, how he eats, when he eats, and when he doesn’t eat (since he does intermittent fasting).
He can also continue to exercise and vary his exercise styles, then end his workouts with cold showers.
By continuing this healthy lifestyle, he can make a few “possible” forecasts using his patterns of activities. Based on these activities, he can be healthier than he would have been otherwise.
However, Professor Litman acknowledges there could be another variant of the coronavirus or another disease that could make him sick regardless of all his healthy habits.
Even if that’s the case, he still has a choice to do what he can do NOW to achieve his potential preference for his health—feel stronger and prevent getting sick—and yet become non-attached to his goals because as he says:
“Most things are truly beyond our control.”
Professor Litman states what he can do at the moment is to stay healthy as his life allows, and let go of the outcomes or any attachment to a particular outcome.
Besides, he believes worrying too much about the future won’t do him good anyway! The added stress will only cause him to be less healthy.
The lesson he always tries to remind himself?
“Having anything more than preferences of the future will set me up for disappointment.”
Professor Litman says that doesn’t mean being detached to his preferences and goals. It means being non-attached to his preferred objectives.
Being detached has a negative connotation. Being non-attached is powerful because it prevents him from missing out on other good opportunities or outcomes.
Being non-attached is a powerful and vital mindset in investing…
Professor Litman states investing requires a non-attached mindset. Why?
It’s because no one can accurately predict the markets! Various events in the financial industry, especially “black swan” events like the COVID-19 pandemic and the terrorist attack in 2001, are impossible to plan for or predict.
Sure, you can spend your whole day getting nervous about it or worrying about it… but what happens after that?
Does it make you feel better?
Does it help solve your concerns?
Does it change anything?
No one knows what will happen to the markets in the future. We only see patterns and through that, we make the nearest possible forecast.
At Altimetry Financial Research, Professor Litman and his team value data. They use data to teach investors to make better and wiser investment decisions.
… and by putting all their data together, they understand where the market is at present and where it is heading.
What can you do NOW as an investor?
With bearish headlines running rampant in mainstream media nowadays, it’s easy to get worried about what’s going to happen to the markets.
However, instead of worrying about inflation, the latest jobs report, the supply chain, or the current variant of the coronavirus, use the here and now to take a step back and look at the bigger picture.
Professor Litman says smart investors allow data to form their hypotheses. By being non-attached, you can make sense of what the available data is saying and go where the market is heading, not fighting the trends and headwinds that are materializing.
Additionally, he and his team at Altimetry believe 2022 will be the best year for investors. Why?
It’s because data points to 2022 as being the start of the biggest corporate investment cycle of the century!
This means there will be more investment opportunities in big sectors like infrastructure, the Internet of Things (IoT), and advanced data analytics.
… and the only way you can grab these opportunities is to avoid worrying too much and just continue doing what you can do best at the moment so you can move towards a better financial future.
We hope you learned a lot of useful investing insights from Professor Litman’s advice!
By becoming non-attached to a particular investing goal or preference, you can avoid frustrations and disappointments in the future, and also welcome other great surprises in your financial life.
Have an awesome, stress-free day ahead!
(This article is from The Business Builder Daily, a newsletter by The I Institute in collaboration with MBO Partners.)
About The Dynamic Marketing Communiqué’s
“Wednesdays: The Independent Investor”
To best understand a firm, it makes sense to know its underlying earning power.
In two of the greatest books ever written on investing, the “Intelligent Investor” by Benjamin Graham and “Security Analysis” by David Dodd and Benjamin Graham (yes, Graham authored both of these books), the term “earning power” is mentioned hundreds of times.
Despite that, it’s surprising how earning power is mentioned seldomly in literature on business strategy. If the goal of a business is wealth creation, then the performance metrics must include the earning power concept.
Every Wednesday, we’ll publish investing tips and insights in accordance with the practices of some of the world’s greatest investors.
We make certain that these articles help you identify and separate the best companies from the worst, and develop your investing prowess in the long run.
To help you get on that path towards the greatest value creation in investing.
Hope you’ve found this week’s insights interesting and helpful.
Stay tuned for next Wednesday’s “The Independent Investor!”
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