I am just wrapping up my first week of hosting my closing bell show on StockCharts TV, The Final Bar (you can catch it on weekdays at 4pm EST). Most of the days this week I have had the opportunity to have a guest on the show. This has given me the opportunity to pick the brain of some really capable market strategists and analysts. The one thing that has struck me the most is that I give them 3-5 minutes to give me their individual take on the market and most of them are coming at me with really long term charts.
One particular guest, Mark Newton, actually had charts going back twenty to thirty years. Wow! It was interesting to learn how many of these professionals really tune into the long-term movements, rather than the short term of the market.
You may remember that I have mentioned the idea of ‘flickering ticks’ in the past. If we get too caught up in the ‘flickering ticks’ of the market, we in turn get caught up in the movement of the red and green and ultimately we forget to tune into the long-term picture.
When I coach financial advisors on their investment process, I have them share their routine to break down and examine their process. The majority of times I have found that there is a disconnect between their investment approach (how they are trying to ‘win’ the game) and what their routine is geared for. They are trying to make a long-term play but are too caught up in the short-term movements.
This is often a challenge if you pay too much attention to financial media, especially if you are not doing it in a disciplined way. When you are always looking for a new headline or story (as we all know there is an abundance of these stories), every little movement can be a potential theme. As an investor, you are hurting yourself by focusing too short term, and need to remind yourself to look at the overall big picture.
Every Sunday afternoon, I have a strategy session with my wife (usually). During this session I look at my overall weekly goals and my wife and I look at our calendars together and see where we need to be as a family. This helps me to prioritize and organize my time during the week so that I can pursue and accomplish those goals both individually and as a family.
My question to you:
What are you doing to prevent a short-term orientation and really plug into a long-term orientation both as an investor and as a human being?
RR#6,
Dave
Disclaimer: This blog is for educational purposes only and should not be construed as financial advice. Please see the Disclaimer page for full details.
