Thursday, July 25, 2019

Philosophy acts as the glue.............


It's not always easy to define yourself as an investor.  There are so many labels out there that it can be hard to keep up—value investor, short-term trader, index investor, active investor, diversified asset allocator, buy, hold, and rebalance, trend follower, tactical, quantitative/systematic, technical analysis, risk parity, and the list could go on.   There's no right or wrong answer for every single individual.  What matters is what works for you.
     There's never going to be a one-size-fits-all investment philosophy for every person.  We all have different strengths and weaknesses.  You have to find a belief system that fits your own personality.  You can't force a square peg through a round hole just because you want to make something work for you.  This will only compound your issues. . . .
     Regardless of the strategy you implement, the true test of your beliefs will always come at those times when it's not working.  These are the times when you investment philosophy should help.
     Inventor and author Rick Ferri summed this up nicely when he said, "Philosophy is universal; strategy is personal; and discipline is required.  Philosophy acts as the glue that holds everything together.  Philosophy first, strategy second and discipline third.  These are the key to successful  investing."

-Ben Carlson, as extracted from A Wealth of Common Sense

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