The stock market’s been wild lately — plenty of high-profile tech stocks are down 50% or more in the last year.
It hurts.
And it’s a good time to focus on the few skills that truly matter over your lifetime as an investor.
3 stick out in my mind:
- Low susceptibility to FOMO (fear of missing out): The urge to buy an investment because its price went up means you probably don’t know why the price has gone up. And if you don’t know why the price has gone up, you’re more likely to bail when it falls — which can be the worst possible time to sell. Quash the need to own what’s going up the most, and you reduce the urge to abandon whatever eventually goes down.
- Becoming comfortable being miserable: And misery can come in many forms. Losing money can be miserable. So is the honest admission that your investment success may not have come entirely from skill. The trick is not assuming you can avoid being miserable, but becoming comfortable with and accepting the feeling when it arises.
- Defining and understanding what game you’re playing: Many investing debates don’t reflect genuine disagreement; they reflect investors playing different games talking over each other. Nobody should pretend a 17-year-old day trader is playing the same game as a 97-year-old widow on a fixed income. Understanding your game, without being swayed by people playing different games, is an investing power.