Yesterday’s News Gets You Nowhere
Should reading the latest news headlines be a factor in your investment decisions? Generally, the majority of news is simply a rationale for what has already occurred in the markets and therefore useless information for building a winning investment portfolio. Providing Investors with explanations about how a specific set of economic data or events impacted the markets is educational at best. Acquiring such knowledge is great but is typically only good for scholarly conversations with friends and associates. The stock market is said to be forward looking so looking at stale news for the purpose of stock picking will lead to average results at best. So, how about forecasting the future economy and determining what industry or sector is going to benefit? This would be great but your odds of being wrong are extremely high as no one has the ability to see into the future.
The right approach to building a solid investment portfolio might be slightly different for everyone but successful investors who are consistent and deliberate in their search for value will have a higher degree of success. Finding value does not always imply that an investor is a value investor in the traditional sense but just someone looking to not overpay for stock purchases. Whether your investment style is value, growth, or momentum, overpaying on stock purchases is going to limit your upside potential and increase portfolio risk relative to the overall market. A big part of winning big over time is not losing big. Oftentimes there are funds that report big returns but never show up in the top percentile rankings over time, mainly because they lose big when their bets on the future are wrong. Just like stale news, these funds serve no purpose for investors looking to build a winning portfolio that provides higher returns with low risk.
The search for above average investment returns is never ending but very achievable if you are willing to look beyond the average choices. Investors need to look for idea generators who can make money for them rather than from them by offering investment solutions that are highly cost efficient. Unfortunately, for retail Investors in particular, it is hard to move beyond the average choices without creating your own investment strategy and most people are not interested in putting in the necessary time and energy to build a winning investment strategy. This is why low-cost passive investment approaches are becoming increasingly popular, but these passive approaches only guarantee a return below average after fees. Why shouldn’t retail Investors have options that are effective and available at a reasonable cost?
If doing it yourself is not an option and you are tired of picking losers or investing with losers, then now might be the right time for you to think outside the box. After all, where have the confines of the box gotten you to date? Mutual funds, advisors, hedge funds, and retirement account investment choices are the four options typically available to retail Investors, and ironically a square has four sides. If you are looking to step outside of the square and into a new world of possibilities that bring significantly higher returns with lower risks, then you need to contact Investoristics to find out more about our approach.
