If You Could Only Know ONE Thing About Trading/Investing And Become Super Successful, This Is That ONE Thing!

Near the bottom of every cycle, when bearishness is at its most ferocious levels, valuations tend to be at their best.

This is just how markets work, like night follows day, again and again.

Buy low, sell high, year after year, decade after decade, and get RICH!  Filthy rich without hardly moving a muscle.

Now, I don’t mean to insinuate making money in the market is always easy or repeatable.  Quite the contrary – making money in the market consistently is hard. However, it can get easier once you start following your emotions…then doing the opposite!

Only by making hard decisions and taking actions that don’t necessarily feel good, can one hope to become anything close to a stock market genius.

Oh, and you’ve got to have patience, too, or call it faith.  Lots of patience and faith (nobody teaches that).

Eventually, with repetition and experience, feelings of fear and nervousness become reliable indicators to “buy”.  Thoughts of greed and riches become indicators to “sell”.  Easier said than done.  But if you could only know ONE thing about trading, if you could only make decisions based on ONE piece of information and be successful, arguably that would be it.

Despite what television and marketing has led many to believe, trading successfully has little to do with intelligence (IQ).

And of course, just because we feel an emotion like fear or greed today doesn’t mean markets will flip for us or against us tomorrow (maybe not even next month). These emotions are to be used as indicators-signals-barometers, however you want to think about it, for helping understand what actions we should be making in our portfolio.  Over time, doing the opposite of what feels good and easy is what ultimately leads to big rewards.  History proves this again and again, but most people never learn how to become master over their emotions.  They follow the crowd, which is ruled by emotion.  Therefore, they tend to lose money in the market more often than they win (or suffer painful losses near key turning points following a winning streak).

Exercising, going to the gym, might make for a good analogy here.

How many people really enjoy exercising?

Some, but most don’t.

If there’s any enjoyment to be found in exercising, for most people it’s that feeling when they’re walking OUT of the gym.

Don’t make the mistake of thinking it’s all about physicality and energy, either.  The mental component of exercising is also very important, yet probably overlooked.

You’ve got to have faith, too!

After making time and putting in the effort, anybody committing to an exercise routine must believe some payoff will eventually come.  Because it sure doesn’t happen overnight!  The payoff doesn’t normally happen in a week, either.  Sometimes it can take months before people see a noticeable difference.  Wouldn’t you agree?

I think this arrangement is reasonable, though – work hard, eat right, have faith…then reap the rewards.

When it comes to health, these tried and true actions work for everybody.  Over the medium and long-term it’s a guarantee!

If somebody wants to lose weight, they’ll lose weight.

If they want to build muscle, they’ll build muscle.

So imagine the shock it must be for someone who starts exercising and then GAINS weight!  OMG!  The horror.  Here they mustered up the time and spent the energy, but no payoff!  Where’s the payoff?  Thoughts of frustration and confusion would set in, probably even self doubt – exercise just doesn’t work for me [insert whiny voice].  Within days or weeks, they quit.

Where’s the faith?  Where was their belief?  So they gained a few pounds in the very short-term – does that negate the facts of life?

Obviously, mental toughness and emotional intelligence plays a bigger factor than many appreciate.  Because if that person had stayed the course, followed through and taken those tried and true action, they’d get rewarded.  The payoff would come.  It’s practically a guarantee, whether you’re talking about exercise (health) or investments (money).