MAY 23, 2020
📒 💸Golden TICKET in investment and lowering expectations
One of the greatest problems of those who want to invest in the stock market is overestimating expectations. Investing in stocks is perceived as a Golden ticket, as a guaranteed return on investment. wealth.
You decide to become an investor - and you already have a billion dollars in your pocket!
I am a supporter of the fundamentally opposite position. I prefer to underestimate expectations of investment returns and results. And both on their own investments, and on the investment strategies of clients.
A clear demonstration of this approach is an example in the video clip about losses of oil speculators. Denis believes that the example with AT&T is not the most positive. Invest 20 years to get only $ 40 per share when the market was growing at an incredible rate? Which is better than an example of not found it?
There would have been, of course. The same Apple that I loved brought huge returns to its owners. But I lowered my expectations by showing a very negative scenario in which the stock was still a good choice. A growing and stable passive income that can be paid equally stably. Consider that you have bought a 30-year bond with a rising coupon!
When caught in the trap of inflated expectations, investors quickly become frustrated because it is impossible to see constant strong growth in the market. Such novice investors like to catch all sorts of gurus, promising fast and high returns yield:
"50%-100% every year! Super-hot and promising promotions! Fly in, buy, invest!"
Unfortunately, sobering up comes quickly - and with it often the loss of money, because not hot stocks are often not shares, but the real manure: no profits, no dividends, real result.
I prefer to underestimate expectations, indicating the profitability and possible results of investing. I try to take a long period of assessment time, capturing both the crisis of 2008-2009 and the current correction. It is easy to take the bottom of 2008-2009, and then calculate the incredible growth. But more objectively - assess the dynamics in the crisis period as well.
Lower your expectations! Don't grab diamonds from the sky - because they are not diamonds, but pieces of Chinese plastic that will crumble very soon, giving false hope.
Think rationally, try to choose a scenario in which even in the very beginning of the game, you can in the worst case scenario, the result will be acceptable.
Good luck with your investment!