Mind Games: What Game Are You Playing?
Have you ever tried playing tennis with a golf club instead of a racket? Or attempted to navigate the basketball court while wearing hockey skates? It’s safe to say that using the wrong equipment for a game can significantly hinder your performance. The same principle applies when it comes to investing.
The Investing Games
In the world of investing, there are two primary games at play: short-term investing, often referred to as trading, and long-term investing.
For short-term traders, the essential equipment includes stock charts, quotations, financial TV programs, and forecasts. Short-term outcomes are heavily influenced by factors like luck, chance, and the prevailing sentiments of other traders at any given moment.
On the other hand, long-term investors require different equipment. This includes a well-crafted financial plan, a customized investment strategy, and the cultivation of patience to embrace the long view. In the long-term game, fundamentals, such as a company’s earnings, become the primary drivers of market outcomes.
The Benefits of Playing the Long Game
Over the past seven decades, financial markets have witnessed significant temporary losses. These downturns were undoubtedly concerning when they occurred. However, they paled in comparison to the subsequent market gains.
The key to success in the world of investing lies in recognizing which game you want to play. Once you’ve identified your game, it’s imperative to choose the right equipment for that specific game. But here’s where we come into play as your trusted advisors.
We act as your coach, guiding you on your journey of pursuing your financial goals. Whether you’re a short-term trader or a long-term investor, our role is to provide you with the insights, strategies, and support you need to make informed decisions and enhance your investment game.
By Anthony C. Williams, CWS, ChFC, MRFC, CLU | Investment Advisor Representative | President & Founding Partner of Mosaic Financial Associates & Orthopaedist Advisory Group | Securities and advisory services offered through Cetera Advisors LLC, Member FINRA/SIPC, a broker/dealer and a Registered Investment Advisor. Cetera is under separate ownership from any other named entity.
©The Behavioral Finance Network. Used with permission.