In the last couple of weeks, I have tried to colorfully speak to people about my experience on the street as an insider. The coronavirus has created a dynamic opportunity for newbies to get involved, and to create a long-term investment portfolio. If you are in your 20’s, 30’s, or 40’s, you might be able to look at this moment twenty years down the road and be glad that you created a dollar-cost averaging strategy to make your retirement picture look rosy. Or you might say, “I should have, but I didn’t.” If you live perpetually on “Some Day Isle,” saying, someday I’ll do this, and someday I’ll do that, you will just wish that you did. So, I’ll just start with a basic approach to investing.
First, we must recognize that the market thrives on emotions. The two dominant emotions that make the markets move are “fear,” and “greed.” Investment decisions are being made because of these emotions. What we are seeing is a world in fear. Fear can make us sell when we should buy. Greed can make us buy when we should sell. In his book, “The Affluent Society,” John Kenneth Galbraith, past Professor Emeritus of Economics at Harvard University said, “The first task is to see the way our economic attitudes are rooted in poverty, inequality and economic peril of the past.” The wealth that we see today, has not always been. In the history of the world, most people have been poor, except for America’s and Europe’s strides towards creating a world that had been previously dominated by aristocrats and empirical wealth.
We now live in a different world, and I doubt that what was, will ever be again. As I write this article, the NYSE is vacant. However, technology has created a new window to create wealth which requires knowledge. So, no longer can we just throw money in the air and ask it to compound itself without knowing what. Right now, they will tell you that this is the greatest buying opportunity ever. But learn how to read the markets. Go on youtube.com, take some economic courses at the local Junior College, listen to financial news, and begin to formulate your own strategy. This event has erased stock market gains achieved over the last five years, and it’s not over yet.
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