“Most investors make several mistakes fighter pilots don’t,” Steve said.
“The biggest problem is a loss of situational awareness,” Steve observed. Meaning that they don’t understand what’s happening around them because they become hyper-focused on one or two things happening right in front of them.
Turns out most investors – like fighter pilots – get into trouble when they let their fears change their decision process.
“Contrary to what people think, nothing happens in an F-14 without a checklist… nothing.” The irony, says Steve, is that people “instinctively focus on not losing money when making it is actually the objective.”
“Being scared is normal,” says Steve. “But losing control over how you perceive your environment is the real problem. Checklists, like proven investment tactics, exist because they work, not just for kicks and giggles.”
“This is deceptive,” he noted. “The vast majority of people want to succeed but, in doing so, overestimate their ability to recover from a crisis like this one. So, they spiral out of control and, unfortunately meet an undesirable end that was entirely preventable, had they followed procedures and training.”
I’ve seen similar behavior countless times over the years from investors who think they’re playing it safe by going to the sidelines, only to realize too late that they’ve actually created more risk by doing so.
The fact that so many sold everything during the Global Financial Crisis and never got back in is one of the most glaring examples.
Steve leaned in and said succinctly, “Focus is everything, and as long as you have that, you will adapt to changing conditions, you will remain ‘mission oriented,’ and, odds are, you will win.”
Source: Total Wealth
https://totalwealthresearch.com/2020/04 ... 3A31%3A39Z
