New highs
Most common investors know the market top very well, because there is euphoria all around, markets are hitting new highs every day, everyone is making lot of money, people are moving around with a broad smile on their face, buying new cars, clothes and planning great vacation packages. Everyone is pumping in all their money into the market to join the party. However very few and almost none of the common investors are able to encash their profits before the market tops out. Market swiftly hits the peak and comes rolling down leaving the euphoric investors with just a number, a new peak at which they pumped all their money in and a peak that now looks farther than the Everest peak.
New lows
On the other side when markets are making new bottoms every day or grinding lower slowly eroding your networth everyday, it is way to painful to monitor it daily. Most investors prefer to forget about their portfolio during this time and concentrate on important things in life like career and family. Well, until the market comes roaring back again and slowly the news starts spreading and again you start seeing positive news and cheer on some faces and then its time to again start pumping money into the market.
The cycle of highs and lows
Do you see a problem here? these investors are bound to invest everytime at market peaks and lose every opportunity when the market troughs. This happens every cycle and over time these investors lose their money and heart and just stop and try to rebuild their lives by working harder and longer hours in the office hoping to get few extra percent increments at the end of the year to compensate all the loses made in the market. Even worse they start saving on all the necessary expenses also to compensate for the market loses. Slowly they become bitter and unhappy. Now do you see a problem here?
Everest Peak
To reach the Everest peak you have to start at the bottom, go step-by-step acclimating to the thin air as you move up. You cannot directly drop yourself at the Everest peak. To reach the peak in the stock market you have to do the same thing. If you are not prepared for this, you should stay in the valley. The mountain peaks are not for you. Sorry, no better way to say this.
What applies to the market, also applies to each of its stocks. Stocks are genuine businesses. They go through cycles both good and bad. Great businesses run by great people survive the bad cycles and thrive during the good cycles. Great investors do the same.
New highs or new lows, peak or trough, easy or difficult, volatile or stagnated, remember wealth is created by great investors and not by great markets. Don't worry about what others are doing. Not everyone reaches the top. Focus on the Everest peak and stop worrying about the chilly wind and everything else. Enjoy the hike no matter how difficult or grinding it may seem. This is a spiritual victory that is bigger than anything else, not for everyone but just for the very few who can hike up from the bottom to the peak.
Most common investors know the market top very well, because there is euphoria all around, markets are hitting new highs every day, everyone is making lot of money, people are moving around with a broad smile on their face, buying new cars, clothes and planning great vacation packages. Everyone is pumping in all their money into the market to join the party. However very few and almost none of the common investors are able to encash their profits before the market tops out. Market swiftly hits the peak and comes rolling down leaving the euphoric investors with just a number, a new peak at which they pumped all their money in and a peak that now looks farther than the Everest peak.
New lows
On the other side when markets are making new bottoms every day or grinding lower slowly eroding your networth everyday, it is way to painful to monitor it daily. Most investors prefer to forget about their portfolio during this time and concentrate on important things in life like career and family. Well, until the market comes roaring back again and slowly the news starts spreading and again you start seeing positive news and cheer on some faces and then its time to again start pumping money into the market.
The cycle of highs and lows
Do you see a problem here? these investors are bound to invest everytime at market peaks and lose every opportunity when the market troughs. This happens every cycle and over time these investors lose their money and heart and just stop and try to rebuild their lives by working harder and longer hours in the office hoping to get few extra percent increments at the end of the year to compensate all the loses made in the market. Even worse they start saving on all the necessary expenses also to compensate for the market loses. Slowly they become bitter and unhappy. Now do you see a problem here?
Everest Peak
To reach the Everest peak you have to start at the bottom, go step-by-step acclimating to the thin air as you move up. You cannot directly drop yourself at the Everest peak. To reach the peak in the stock market you have to do the same thing. If you are not prepared for this, you should stay in the valley. The mountain peaks are not for you. Sorry, no better way to say this.
What applies to the market, also applies to each of its stocks. Stocks are genuine businesses. They go through cycles both good and bad. Great businesses run by great people survive the bad cycles and thrive during the good cycles. Great investors do the same.
New highs or new lows, peak or trough, easy or difficult, volatile or stagnated, remember wealth is created by great investors and not by great markets. Don't worry about what others are doing. Not everyone reaches the top. Focus on the Everest peak and stop worrying about the chilly wind and everything else. Enjoy the hike no matter how difficult or grinding it may seem. This is a spiritual victory that is bigger than anything else, not for everyone but just for the very few who can hike up from the bottom to the peak.
No comments:
Post a Comment