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When The Brain & Heart Speaks Differently

Updated: Dec 17, 2019

I came across this email from Seth Godin and it reminds me of investing.


"

On my way to work, I need to make a left turn on a somewhat busy street.


If there’s no traffic, it’s easy. Stop at the stop sign, look and go.


And if there’s dense traffic, the decision is easy as well. Wait.


It’s interesting to note what happens when the traffic is intermittent, with a car every ten or twenty seconds. I’ll sit and wait, because the cars are on the edge of too close to each other.


I mean, I could go, but it’s a high energy zoom to make it safely, and it’s easier to wait.


But… if the intermittent traffic continues, five cars, ten cars… all the same spacing… pretty soon, I’m more inclined to go for it.


This is a dumb strategy.


I shouldn’t let the persistence of the other cars push me to make a decision. Either it’s safe or it’s not.


Many times, people would ask for my opinions about the stock market.


They will lament that they had missed out some good opportunities or heard of many horror stories of people losing much money in it.


To me, investing in the stock market is like crossing the street.


  • Do your research

  • Invest with money that you can afford to lose

  • Have a long enough time horizon for the stocks/ funds to rise

  • Sit back, relax and let the stock market do its job


Yet, many people when they reach the final step, they have a tendency to panic.


The market has gone up. The stock that I had been eyeing had run up 50%. I should not buy now since the market is at a new high.


The market has dropped. The stock is on discount. I should wait further given that the market may drop further. I should not catch "a falling knife".


The market has rallied and gone back to the original price when I first saw it. Given such volatility, I should not enter since I am not certain if the stock may drop again in the future.


If you find this scenario very familiar, you are not alone.


Investing is not just about numbers (brain), but also about the emotions (heart).


I prefer investing in the long term.


I am too lazy to constantly gluing my eyes on the daily or monthly chart to make that additional 5 or 10% gain.


After pulling the trigger, I would sit back, relax and let the market do its magic.


Because of that, I leverage on the market's performance to generate the double or triple digits returns.


That, I believe, is what investing is about.


In my opinion, this strategy befits the term, passive income.


If I had to monitor the market for its daily movements, I feel like it is as good as taking on another part-time job.


Does that mean I don't monitor the market, the short answer is no.


I still do.


I will decipher if the information will have a structural or major impact on the company or fund I had picked.


If new changes do not impact the company or fund, then it is noise.


I reckon it is this part that makes investing in the market so tricky.


It is an art more than science at this juncture.


If investing in the market is something you had always wanted to do but had yet to start, feel free to contact me for a consultation.


We can see how we can work together.


Because the best time to start anything was yesterday.


The next best time is now.

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