Jumat, 20 November 2020

Why Envy Is the Worst Investment Strategy

Jeff Clark's Market Minute

Why Envy Is the Worst Investment Strategy

By Jeff Clark, editor, Market Minute

I have a single-frame comic strip taped to the bottom right-hand corner of my desk.

It’s a picture of a man sitting at his breakfast table. He’s slumped over in his chair, and his forehead is resting on the table. Behind the man is his wife. She’s standing in her bathrobe, curlers in her hair, and holding a cup of coffee in one hand. Her other hand is pointed upright, with her index finger extended – as if she’s lecturing.

The caption reads, “Last month you were upset because you weren’t in the stock market. Today, you’re upset because you are in it. How will you feel next month?”

The comic ran in my local newspaper back in late October 1987 – just after the crash. But it could have just as easily appeared this past February when the S&P 500 fell 26% from a record closing high in just three weeks.

Investors felt pressured to buy stocks in the beginning of January. The stock market moved higher almost every day. Everybody else was getting rich. And then COVID-19 came state-side… and everything turned upside down for a while.

The lesson here is that investors should resist the urge to buy stocks (or any other financial asset) when they feel pressured to do so. Chasing stocks higher into overbought conditions is usually a bad idea.

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When it comes to investing, I've always said we shouldn’t let emotions get in the way of when to buy or sell stocks since it can cloud our judgement.

Trading the stock market is a game that never ends. It doesn’t matter if you underperform the market for short periods of time. You’ll have a chance to outperform as stock prices revert to the mean. As long as you don’t run out of cash, the game continues.

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It doesn’t matter if all your friends are making more money than you. Be happy for them. Prosperity is a good thing. But don’t let their success coax you into high-risk, low-reward trades. Envy is a horrible investment strategy.

So, the next time you’re feeling anxious, frustrated, and upset that the markets are running away without you and everyone else is making more money than you are… think back to the action in the markets over this past year…

Then, ask yourself… How will you feel next month?

Best regards and good trading,

Jeff Clark

Reader Mailbag

In today’s mailbag, Jeff Clark Trader member Roxanne thanks Jeff for a presentation he did a while back with his son, Carson…

Hey Jeff, thank you to both you and Carson for being so sweet. And I would love to learn the way you did your trade Carson, that was a great presentation. Thank you.

– Roxanne

Thank you, as always, for your thoughtful comments. We look forward to reading them every day. Keep them coming – and send us any questions – at feedback@jeffclarktrader.com.

In Case You Missed It…

This "Unpopular" Play BEATS the S&P, Nasdaq, and Dow

Take a look at this chart… You see the white line?

This "unpopular" investment is obliterating the S&P 500, the Nasdaq and the Dow by a factor of nearly 4-to-1.

Yet, it's one of the most hated investments on the planet.

If you're near retirement or own ANY stocks, you'll want to watch this video now.

Click here to watch now (Pay close attention at 0:38).

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Jeff Clark Trader
55 NE 5th Avenue, Delray Beach, FL 33483
www.jeffclarktrader.com

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