by winston » Fri May 14, 2021 8:50 am
What action step can nervous investors take today to help them focus on the long-term while this craziness plays out?
1. Build a map. Take all the traditional sectors – technology, finance, industrials, and so on. And then break them down into sub-sectors.
For example, in transportation, there’s autonomous vehicles, electric vehicles, charging stations, flying cars, batteries…
2. Create this big map, then say, “this is where we are now. Now, where will the future be?”
3. Factor in investment themes such as inflation in the future and higher interest rates in the future, and how that will play out…
4. How will we allocate our portfolios to that? And how much percentage in each?
If you’re managing your money at home, every once in a while, lay that out. You might realize you have too much in growth, or in electric vehicles… Too much in one area, not enough in other areas.
The big money this decade will be made through tech. So, staying with tech despite today’s weakness boils down to a choice you must make – will you focus on the short-term or long-term?
At the end of the day, from month-to-month, quarter-to-quarter, markets can be very irrational. Extremely inefficient.
But over time, they become rational.
Trust me – over time, the Amazon’s of the world will go up. The Boston Beer’s of the world will go up. Because they’re increasing sales, increasing their bottom line, and are taking market share.
It’s pretty simple – if companies are able to do that, their share price will move higher.
Source: Investor Place
It's all about "how much you made when you were right" & "how little you lost when you were wrong"
