Successful investing is about discipline – not intelligence , nor access to specialized investments .
Yet , even as you read this first sentence , you likely don ’ t want to believe it . After all , we want it to be about a special investment idea you just discovered in Forbes that nobody else who reads Forbes discovered .
You want investing to be about an elaborate system , a new idea and achieving “ alpha ” while neutralizing “ beta .” You want this to be true , because the moment someone suggests successful investing is about consistently saving money into a boring investment program while remaining emotionally detached , the onus falls on you – and nobody else . A dietitian can prescribe regimented diet and exercise , but it ’ s of no use if you fall back into your normal routine of craft beer and Seinfeld reruns .
Control What You Can Control
Emotion is the enemy of investing , and it provokes behavioral biases . Classical economic theory is based on rational people making rational decisions . But we don ’ t . How else can you explain DALBAR ’ s annual
Quantitative Analysis of Investor Behavior study , which suggests that investors have captured approximately 20 percent of the available return available to them in any time period measured ?
Investing shouldn ’ t be exciting or frightening . My recommendation : turn off CNBC and check your emotions at the door .
Beyond moderating our feelings , we have three available levers we can exercise in our investing program .
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