The stock market is doing crazy things, driven largely by a small number of technology-driven stocks and the emotions of investors. Securing long-term wealth through the pursuit of hot stocks is a mighty challenge.
Keep these thoughts in mind . . .
1. Markets are efficient. According to SPIVA scorecard, less than 20% of professional stock pickers have outperformed respective benchmarks. You might win for a week, a month, or a year. Over the longer haul (yes, we are investing for the long haul, not speculating for the week), it is difficult to beat benchmarks.
2. If you do want to speculate, keep it at 5% of your portfolio or less, which leads me to my next point . . .
3. If you are going to limit your speculating to 5% of your portfolio, win or lose, it probably won't have a material impact on your financial well-being, so why waste your time?
Spend your money AND your emotional energy on something more meaningful.
My new book is out November 17th. The Coffeehouse Investor's Ground Rules. Save, Invest, Plan for a life of wealth and happiness. Pre-Order on Amazon.com.
More information can be found at
You can follow the Coffeehouse on Facebook: