Editor's note: No investment strategy is one-size-fits-all. In this classic essay – which we last published here in March 2019 – editor Mike Barrett explains why following the pros may not be enough to help you succeed. You'll get a lot further if you know yourself inside and out... and make sure your investment style is the right fit for your wealth-building goals.
If You're Not Getting the Results You Want, Ask Yourself These Two Questions By Mike Barrett, editor, Select Value Opportunities
For almost 40 years, the Golden State Warriors were one of the NBA's perennial laughingstocks... The Warriors let future Hall of Fame coaches slip through their fingers... They traded away future All-Stars for players who went bust... And they squandered numerous draft picks. It's not hard to see why owner Joe Lacob was ridiculed when, after purchasing the team in 2010, he said the goal was to win a championship within five years. But it turns out, Lacob got the last laugh... Golden State won the title in 2015, 2017, 2018, and, most recently, 2022. It's also an odds-on favorite to make it to the NBA finals this season. What caused this abrupt change in fortunes? It wasn't luck... And it turns out, investors can take an important lesson from Golden State's rise from mediocrity to greatness. It involves two simple ways you can set yourself up for success in the markets. Let me show you what I mean...
| Recommended Links: |  The No. 1 Way to Protect Your Portfolio in 2024 Dr. David "Doc" Eifrig is typically among our most upbeat and optimistic analysts. But today, he's deeply worried about the market: "Consumers have blown through their pandemic savings... corporate bankruptcies are soaring... the era of easy money is over... and what happens next is not going to be pretty," he says. The solution? A little-known "income loophole" that could save your portfolio and retirement accounts. You'll be STUNNED when you see the proof, right here. | |
|---|
|
Lacob and his executives did a lot for the Warriors' incredible turnaround when they hired head coach Steve Kerr in 2014... Kerr had won five NBA titles as a player. During his first season as coach, Kerr brought Golden State its first championship in four decades. Kerr didn't come in with some preconceived, utopian notion of what would work best for any team. Instead, he crafted a game plan that was an ideal fit for this specific team. Coaches in sports at every level come and go all the time. Much of their failure can be traced to a single root cause: The system that worked well for them in the past simply didn't translate into success for their latest team. Kerr turned this approach on its head... After extensively studying the strengths of every player on the team, he built an offensive scheme that was a great fit for their top attributes. These two examples get to the heart of the matter. If you're not getting the investment results you want, you need to ask yourself the following two questions... - Am I really using the right investment strategies for me?
- Am I relying on the right investment research for those strategies?
Let's start with the first question... Aswath Damodaran is a finance professor at New York University's Stern School of Business. He's one of the brightest investing minds you've likely never heard of. And like Kerr, he knows how important it is to develop a strategy that makes the most sense for you. Here are some words of wisdom from his interview with Forbes... I tell people that the person you have to understand best to be a good investor is yourself. It's not enough to understand what Warren Buffett does and Peter Lynch does. It might surprise people, I spend very little time reading investment books... We live in a Google Search world. People think that if they search long enough, they can [get] answers to their questions, when in fact what they need to do is to stop and think about the questions and think through their answers. We need to own our own investment philosophies. We need to think through what we think about markets. Which means I spend a lot more time with the Wall Street Journal and reading the news of today and trying to figure out why companies are doing what they're doing rather than focusing on what other people think about companies. Or what other people think about investing. In short, no single investment philosophy is the best fit for all investors. What works for Warren Buffett won't necessarily work for you or me. For instance, in a previous DailyWealth essay, I mentioned that my friend Neil was able to retire a wealthy man because he had the right temperament to be a long-term, "buy and hold" investor. This approach requires extraordinary patience and discipline. You need the stomach to buy when everyone else is selling. If you're impatient or inclined to worry about taking losses, this approach is unlikely to work for you. You might have more success with a trend-following strategy that relies on stop losses. Now, ask yourself if you're relying on the right research for your investment strategies... Sports team owners usually make their fortunes doing other things. Lacob is a partner with venture capital firm Kleiner Perkins. Los Angeles Clippers owner Steve Ballmer is the former CEO of Microsoft. These guys can't possibly know everything they need to in order to make crucial (and often highly complex) personnel decisions at this level... so they hire others who possess the knowledge and experience to advise them. Individual investors often find themselves in the same situation. They're busy with running a business or raising a family. They don't have the time (or the desire) to do in-depth investment research, so they hire others – like Stansberry Research – to do it for them. To get the information you need, though, you must know where you fall among different investment strategies (i.e. dividend investing or options trading) and risk profiles (i.e. low risk or high-return potential). As you'll discover, knowing your personal investing style is just the first step. Are you most interested in making steady income for retirement, boosting your capital gains, or finding opportunity in macro trends? Different techniques will get you closer to your individual goals... So make sure you're using the tools and ideas that suit you best. Good investing, Mike Barrett
Editor's note: One of our favorite strategies at Stansberry Research just racked up a streak of 184 winning trades... with zero losers. That's a 94% win rate. With this style of trading, you can position yourself to collect more income – with less risk – during volatile stretches in the markets. For a short time, you can claim this research for the best price we've offered in 13 years... thanks to a special holiday-only offer. This deal will go offline soon... So get the details here. Further Reading "Many investors don't fully understand their risk tolerance," Dr. David Eifrig writes. This is important, because adding the right amount of risk to your investments can improve your returns. Three simple guidelines can help you determine your own risk profile... Read more here. Investing legend Warren Buffett started with one strategy: buying deep value. Over time, though, the "cigar butt" investments he was looking for didn't pan out. So he changed his approach... And that decision changed his career. Here's why Buffett left "pure" value behind – and why it's a lesson to folks today... Learn more here. |
| 
