02/13/24
Read Time 2.974 minutes
Good morning! đ Â
Thereâs not a lot going on that we havenât already talked about...Â
AI continues to blossom, NVDA is charging higher and, of course, inflation data came in hotter than expected. Predictably, futures are in the red.Â
So I thought weâd switch gears and talk about something that trips up a lot of aspiring investors and traders.Â
Overthinking is a far more common problem than youâd believe. Â
The reason may surprise you.Â
Weâre led to understand that the more choices we have â in life and in the financial markets - the more freedom weâll enjoy and the more wealth weâll accumulate.Â
Only thatâs not true.Â
More opportunities mean more choices and more choices mean that itâs harder to make decisions. Predictably, many investors fall into a hopeless spiral that works against âem by wasting so much energy trying to consider all the options that they canât pick even one. Â
Frustration, hopelessness and worry often follow as do poor results.Â
Itâs totally fixable.Â
Five kinds of overthinking youâll want to recognize (and overcome).Â
#1 â Mindless mental chatterÂ
Contrary to what scores of TikTokers and Finfluers would have you believe, you cannot tell yourself to think about something. And the more you do, the harder it is to move on.Â
The Cure: Switch the channel by doing something that requires total concentration. Walk away from your screens and put your phone down. For me itâs motorcycling on a new road or hiking with my bride and our dogs, Lucy and Bryce. For you it might be a great workout or gardening. Â
The point is that you want to force your mind to move on.Â
#2 â Reading into thingsÂ
Youâre not alone if your mind goes into overdrive and youâre prone to imagining all the terrible things that might happen when the opening bell rings. Most of which are self-inflicted, I might add.Â
The Cure:Â Try starting from a position of âI can do thisâ rather than fearing all the things thatâll happen if you donât do whatever is bugging you.Â
Thereâs stuff you can control (like buying world class stocks in companies making must have products and services) and stuff you canât (like the Fed, elections, China, Russia and more).Â
You get the idea.Â
Keep it relevant â youâll be amazed by what happens next and the results you achieve!Â
#3 â Masquerading as a mind readerÂ
The world is set up to bombard us with information. Seemingly everything matters but, in reality, very little actually does. Â
Do you really need to know that...Â
...Taylor Swift partied after the Super Bowl ... with her parents â gasp!Â
... Or that the 3rd derivative of the 6th line in XYZâs upcoming earnings report might mean the price of green doors in Mongolia will change because some analyst who never worked for the company thinks management didnât meet expectations? Â
I donât.Â
Iâm far more interested in companies like Apple and Microsoft that are tapped into the 5Ds because theyâre backed by trillions of dollars that will be spent practically no matter what the Fed does next, whoâs in the White House and how Wall Street tries to rig the system.Â
History shows very clearly that profits will follow over time.Â
The Cure:Â Stick to what matters. Your portfolio will thank you.Â
#4 â Longing for the pastÂ
It's normal to long for the past but when it comes to our money and to achieving success, the far more profitable course of action is to think about the future. Then make it happen.Â
Dwelling on the past is like driving using your rearview mirror. You may find that comfortable, but the markets are forward-looking.Â
The Cure:Â Getting stuck in a mental loop isnât something we can always control. But it is absolutely something we can change if we focus on achieving our goals. That's the forward looking part.Â
#5 â Worrying about what might happen instead of whatâs likely to happenÂ
Many people fail because they worry about all the things that could go wrong. Focus instead on whatâs likely to happen and the path to profits will almost always reveal itself. Â
The markets have spent 83% of the time at or within 10% of all-time highs since 1927!Â
83%!Â
The Cure: Set a timer and give yourself 5 minutes. Write down everything about the markets thatâs bugging you, causing you trepidation or otherwise making you overthink your life and your money. When the timer goes off, crumple your paper, bin it and move on. Â
Yes, it really IS that simple.Â
Bottom LineÂ
âIt isnât what we donât know that gives us trouble, itâs what we know that ainât so.âÂ
- Will Rogers, American HumoristÂ
Now get out there and, as always, MAKE it a great day!Â
You got this.Â
Keith đ |