Part 4: Strategy or How the heck do I get to Financial Freedom?
4.4 Ride the market and don’t try to beat it
People are obsessed with beating the market. Are you? How to think about the Market?
Fund Manager whose business and therefore life is justified only by beating the market are obsessed with this. And that too in the year because a poor than market performance in a year means a sharp drop in the money coming into his fund. So, they have to and will do anything to report good performance number every year. At least most of them will. Beating the market defines their investing strategy to a very large extent. Which includes getting out if the stock is unlikely to go up in the year and buying something that can. And for them being invested in a stock for about a year qualifies as a long-term perspective.
I don’t know but that makes the market sound like Enemy No.1 for Fund Managers. Probably it is.
The difference in the perspective makes a huge difference in how you approach investing compared to a Fund Manager. The difference is you are not playing to beat the market or Mr. Market as he is called with all the reverence and fear that he commands. That game is very difficult though every tom, dick and harry and his moronic brother-in-law makes it sound so simple that you feel stupid if you are not beating the market. Don’t make beating Mr. Market the objective of your strategy; it’s a game you are unlikely to win. Most Fund Managers...........Read More
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