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Recently, and very sadly, I attended a funeral held by some of my closest friends, for one of their family. Many things go through ones mind on these occasions, health, family, friends. It got me thinking about my work, and others that choose to play the game we do, so I asked......
What if
“what if” is a question I hear from many investors and traders.
What if interest rates rise
What if the housing market collapses
What if the stock market collapses
What if global stimulus doesn’t work
What if the global debt sends the world economies into another great depression
What if we have hyper inflation and money becomes almost worthless
What if we have deflation and assets become almost worthless
What if there is a war
What if Europe falls into total chaos via a collapse of the Euro
What if China collapses
What if it’s all just a global bubble and a house of cards destined to end in certain disaster
Some or all of the above could be valid concerns, which one of the “what ifs” should we worry about the most?
What ones are more likely and in what order will the above scenarios unfold? How safe will we be and how do I support my familily and friends? The safest thing to do is probably nothing, it’s all too uncertain and dangerous. Investing and particularly trading is for mugs.
Ask not why but what
When I was living in the Buddhist meditation centre, one of the most thought provoking and arguably the wisest statements I heard was “ask not why, but what”
The philosophy is this: if you continually ask why something has happened, or is happening (particularly to yourself) sends you down the path of wanting and needing to know the reason behind everything that has or will happen.
To ask what is happening will give you a clearer answer, and puts your mind in a place to respond accordingly, instead of worrying incessantly about needing to know why. A good trader does not ask why his trade is moving in or out of favour, but asks what is happening and then responds. It’s rising, buy, its falling, sell. The reasons why are nearly always given after the fact.
another look at “what if”
What if interest rates stay low for many years
What if the housing market does not collapse but slows to a steady long term growth
What if the stock market does not collapse
What if global stimulus does work
What if the global debt slowly erodes via steady growth and a rebuild of confidence
What if we have moderate inflation stimulating healthy asset growth
What if we have deflation in areas that assists the economy eg: energy costs continue to decrease stimulating households and business
What if there is not a war
What if Europe does not fall into chaos and slowly rebuilds
What if China and India pick up the European slack and drive the Northern hemisphere economies
What if we are on the verge of an incredible period of prosperity like never witnessed before, driven by technology, emerging economies, global co-operation and competiveness.
Some or all could be a pipe dream, some a reality, which one of the “what ifs” should we focus our energy on and invest in?
What ones are more likely and in what order will the above scenarios unfold? The best thing to do is sell the farm, hock the house, leverage ourselves to the eyeballs and invest in anything that moves?
The best thing to do
I trade and teach trend trading. Its called trend trading because the methodology focuses on investing in assets that are rising and using risk control in case it does not perform. Not performing does not mean that you (or me) got it wrong, but that the particular scenario did not pan out the way we had hoped.
Absolutley nobody knows what will happen. The above lists of “possibles and probables” is impossible to ascertain to any degree to what extent or what order any of those things may happen.
Here is what we do know
We know that people that do not plan, and therefore make unmeasured decisions, often fail. People that do plan, make measured decisions based on probability and risk control, often succeed.
So
What is happening?.................. markets are rising
Why?............................................lots of reasons, some we know, some we don’t
What to do now?.........................put your plan to succeed in action
Don’t have a plan?......................that’s your first job to do then, get one.
I will be giving a free lecture about trading, investing and planning in Sydney on the 20/4/2015 at 6.30 p.m.
Venue: Gateway Towers, Invast Financial Services, Cicular Quay
Please RSVP to this email if you intend to come
Peters Portfolio
For current status and changes to the portfolio click on the link below
http://www.easysharetradingsystems.com.au/peters-portfolio.html
"I'm not good at future planning. I don't plan at all. I don't know what I'm doing tomorrow. I don't have a day planner and I don't have a diary."
Heath Ledger (sadly took his own life at age 28)
If Facebook is more you thing, friend him here!
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