In the book the book "The Perfect Portfolio" author Leland Hevner states that the investing environment that we, as individual investors, face today is not a friendly place. Equity prices are buffeted by factors that were inconceivable just a few years ago. Yet while markets have changed dramatically, the investing theories, methods and resources we have available to cope with them have not.
The time has come to pause, take a deep breath and rethink in totality how we view and interact with the equities/stock markets. It is time to recognize that much of what you have been taught about how to invest has changed. To survive and thrive in today’s new investing environment, a completely new approach to personal investing is needed. This new approach is the subject of this article.
In the good old days (not many years ago), investors had a reasonable chance of predicting stock prices by analyzing company financial statements. Investors had a legitimate chance of being successful by doing their homework using basic equity analysis methods and tools. Unfortunately those days are gone. Today a host of factors influence stock prices that have nothing to do with corporate fundamentals, and these factors are almost impossible to analyze using the resources available to us.
What are these new factors?
Let just look at a few:
The internet. The vehicle of mass communication has changed everything. Information (good and bad) travels so fast that anyone with an internet connection can cause millions of people to make uninformed trading decisions and in this manner manipulate stock prices easily and cheaply.
Short selling attacks. Short selling is a major factor that can dramatically influence the price of any stock. A short attack can destroy the value of a stock, and there is no way that individual investors can predict which companies are going to be affected.
Government activism. Government intervention in the free market system can dramatically affect stock prices in either direction.
Speculation. Speculative price swings in assets such as oil, gold, food etc have significant effect on the health of the overall economy. These price movements are not attributable to factors that can be analyzed with any degree of confidence.
In the face of these new market dynamics and the inability of existing investing tools to deal with them, what can the individual investor do? You have three choices.
1. Do nothing and hope for the best. Hopefully you are smart enough not to take this option.
2. Develop revised theories, methods and tools to analyze these new market influences. This is extremely difficult if not near impossible.
3. The most logical choice is to develop an updated and improved approach to personal investing.
The current state of personal investing
Today, investors are confused and often intimidated by the world of personal investing as it currently exists. When seeking to learn how to cope with this new world, they are confronted with hundreds of investing books, countless newsletters, non stop seminars, sales pitches from financial advisors and a constant barrage of information from the talking heads on TV and the financial media.
The world of personal investing today is simply overwhelming for the average person trying to protect and grow their savings. When confronted with this chaos, most people simply give up in despair and either cash out of the stock market and put their money in the bank in low interest deposits, or do nothing and just watch and hope that the market will eventually rise and they will recoup their losses.
What is needed is a simplified approach to investing. One that frees you from the tedious process of analyzing individual stocks and mutual fund styles. One that is logical and easy to understand. One that meets your unique needs and is responsive to changing market conditions. In short, it fixes what is broken in today’s personal investing market.
This new approach will empower you to become more personally involved in the investing process and easily make investing decisions with confidence. My 20 plus years of experience working in the financial services industry and working with investors has shown me that in order for this new approach to work it must:
1. Be easy to understand
2. Be simple to implement
3. Be easy to monitor and change
4. Be responsive to changing market conditions
5. Be customizable
6. Enable superior returns without excessive risk
In Part 2 of this article I will reveal a recently completed study on a strategy that I have been working on for the last eighteen (yes 18) years. This research and strategy has been made possible because of a very powerful software program that I have just completed developing. This software has allowed me to back-test this investment method, over any time frame, using real historical data from any North American Stock, ETF or US based mutual fund. The results have been amazing.
You are about to learn an approach to personal investing from a totally different angle, one that defies tradition. You will need an open mind to appreciate and absorb this paradigm shift. Stay tuned.
Bruce
Sunday, October 31, 2010
Sunday, October 3, 2010
Discovering Your Genius
In the book “The Success System That Never Fails”, author W. Clement Stone states that the start of all personal achievement starts in the mind of the individual. Your personal achievement starts in your own mind. The first step is to know exactly what your problem, goal or desire is. Most people don’t get what they want because they don’t know exactly what they want. If you are not clear about what you want, then write it down and then rewrite it again until the words express precisely what you are after.
All success hinges on the 3 things listed below. Once you truly understand what they mean, you’re on your way to a golden future.
1. Inspiration to Action
The road to success starts when you are inspired to make the effort. Inspiration starts when you are motivated to dissatisfaction with things the way they are. Therefore, inspirational dissatisfaction is the strongest single force in your success system that never fails. Inspiration to action can also be described as having a burning desire. Desire is the beginning of all human achievement.
2. Know-how
Know-how is the quality that enables you to do something at will, with skill, effectiveness and a minimum use of time and effort. Know-how always accomplishes what it sets out to accomplish. Know-how gets things done while people are wondering if they can be done. Know-how built the pyramids of Egypt and the great cathedrals of Europe, it flew the Atlantic and split the atom, it harnessed electricity and put a man on the moon. And it can bring success to you. How do you get it? You don’t get it, you accumulate it, by doing … by experience…by action…it comes to you. When you have it, you will know it and you’ll know its power.
3. Activity Knowledge
Knowledge is knowing about something, know-how is knowing how to do something. Knowledge is information, know-how is technique. You need both. Knowledge is gained anywhere and everywhere. It can be acquired from books, people, things, happenings, history and casual observation. But to be useful it must be organized. You must know what you know. So how does one acquire activity knowledge? By doing what you are afraid to do. When you run away because you are afraid of doing something big, you pass opportunity by. Two self motivators to help you acquire knowledge are: Ask advice from the person who can help you, and It’s never too late to learn, so don’t stop learning.
There are those who have knowledge and know-how, but they don’t succeed. For although they know what to do and how to do it, they don’t feel like doing it, they lack motivation. They are not inspired to action. Therefore inspiration to action is the most is the most important ingredient to success in any human activity .The person who is inspired and motivated can overcome all obstacles.
Motivation is that which induces action or determines choice. It is that which provides a motive. A motive is the “inner urge” within an individual which incites him/her to action, such as an idea, emotion, desire or impulse. It is the hope or other force which starts in an attempt to produce specific results. When strong emotions such as love, faith, anger and hate are mixed they generate an intense driving force that will last through out a lifetime.
So how do you become motivated and inspired to action? How does one develop ambition when you’re not ambitious? How does one develop initiative when you don’t have any? The answer lies in discovering your genius.
Discovering your genius
Every person has a unique genius. You have unique talents, abilities, interests, and values that only you can bring into greatness. You have a destiny that only you can fulfill. Expressing your genius is knowing what you want to do with your life and doing it because it expresses who you really are.
Here are the 4 characteristics of people who have discovered their genius:
Passion: They love what they do. If they weren't getting paid they would do it for free
Talent: They are good at what they do. Call it talent, ability or genius - they've got it.
Values: Doing what they do is extremely important to them.
Destiny: They have a sense that they are doing what they were born to do - making their own unique contribution. It's almost a spiritual thing. It's their destiny.
Create your GENIUS LIST. Once you have created your list you should have a good idea of what you want and be well on your way to success.
PASSION
What do you love to do?
What activities give me satisfaction?
What excites me about life?
What is my secret ambition?
What are my hobbies?
TALENT
What am I good at?
What do I get complemented on?
Where have I excelled in the past?
Where have I been successful?
What are some of my strengths?
VALUES
What is important to me?
What would I do if I were wealthy?
What do I stand for?
What won't I stand for?
What would I risk my life for?
DESTINY
What was I born to do?
What is my unique mission in life?
What does God want me to do?
What are my unique opportunities?
Where can I make a difference?
Who is my soul mate and why?
There is an old Hindu legend stating that when the gods were making the world they said: “Where can we hide the most valuable of treasures, so that they will not be lost? How can we hide the most valuable of treasures, so that they will not be lost? How can we hide them so that the lust and greed of men will not steal or destroy them? What can we do to be assured that these riches will be carried on from generation to generation for the benefit of all mankind?”
So in their wisdom they selected a hiding place that was so obvious it wouldn’t be seen. And there they placed the true riches of life, endowed with the magic power or perpetual self replenishment. In this hiding place these treasures can be found by every living person in every land who follows The Success System That Never Fails. Do you know where the hiding place is…?
All success hinges on the 3 things listed below. Once you truly understand what they mean, you’re on your way to a golden future.
1. Inspiration to Action
The road to success starts when you are inspired to make the effort. Inspiration starts when you are motivated to dissatisfaction with things the way they are. Therefore, inspirational dissatisfaction is the strongest single force in your success system that never fails. Inspiration to action can also be described as having a burning desire. Desire is the beginning of all human achievement.
2. Know-how
Know-how is the quality that enables you to do something at will, with skill, effectiveness and a minimum use of time and effort. Know-how always accomplishes what it sets out to accomplish. Know-how gets things done while people are wondering if they can be done. Know-how built the pyramids of Egypt and the great cathedrals of Europe, it flew the Atlantic and split the atom, it harnessed electricity and put a man on the moon. And it can bring success to you. How do you get it? You don’t get it, you accumulate it, by doing … by experience…by action…it comes to you. When you have it, you will know it and you’ll know its power.
3. Activity Knowledge
Knowledge is knowing about something, know-how is knowing how to do something. Knowledge is information, know-how is technique. You need both. Knowledge is gained anywhere and everywhere. It can be acquired from books, people, things, happenings, history and casual observation. But to be useful it must be organized. You must know what you know. So how does one acquire activity knowledge? By doing what you are afraid to do. When you run away because you are afraid of doing something big, you pass opportunity by. Two self motivators to help you acquire knowledge are: Ask advice from the person who can help you, and It’s never too late to learn, so don’t stop learning.
There are those who have knowledge and know-how, but they don’t succeed. For although they know what to do and how to do it, they don’t feel like doing it, they lack motivation. They are not inspired to action. Therefore inspiration to action is the most is the most important ingredient to success in any human activity .The person who is inspired and motivated can overcome all obstacles.
Motivation is that which induces action or determines choice. It is that which provides a motive. A motive is the “inner urge” within an individual which incites him/her to action, such as an idea, emotion, desire or impulse. It is the hope or other force which starts in an attempt to produce specific results. When strong emotions such as love, faith, anger and hate are mixed they generate an intense driving force that will last through out a lifetime.
So how do you become motivated and inspired to action? How does one develop ambition when you’re not ambitious? How does one develop initiative when you don’t have any? The answer lies in discovering your genius.
Discovering your genius
Every person has a unique genius. You have unique talents, abilities, interests, and values that only you can bring into greatness. You have a destiny that only you can fulfill. Expressing your genius is knowing what you want to do with your life and doing it because it expresses who you really are.
Here are the 4 characteristics of people who have discovered their genius:
Passion: They love what they do. If they weren't getting paid they would do it for free
Talent: They are good at what they do. Call it talent, ability or genius - they've got it.
Values: Doing what they do is extremely important to them.
Destiny: They have a sense that they are doing what they were born to do - making their own unique contribution. It's almost a spiritual thing. It's their destiny.
Create your GENIUS LIST. Once you have created your list you should have a good idea of what you want and be well on your way to success.
PASSION
What do you love to do?
What activities give me satisfaction?
What excites me about life?
What is my secret ambition?
What are my hobbies?
TALENT
What am I good at?
What do I get complemented on?
Where have I excelled in the past?
Where have I been successful?
What are some of my strengths?
VALUES
What is important to me?
What would I do if I were wealthy?
What do I stand for?
What won't I stand for?
What would I risk my life for?
DESTINY
What was I born to do?
What is my unique mission in life?
What does God want me to do?
What are my unique opportunities?
Where can I make a difference?
Who is my soul mate and why?
There is an old Hindu legend stating that when the gods were making the world they said: “Where can we hide the most valuable of treasures, so that they will not be lost? How can we hide the most valuable of treasures, so that they will not be lost? How can we hide them so that the lust and greed of men will not steal or destroy them? What can we do to be assured that these riches will be carried on from generation to generation for the benefit of all mankind?”
So in their wisdom they selected a hiding place that was so obvious it wouldn’t be seen. And there they placed the true riches of life, endowed with the magic power or perpetual self replenishment. In this hiding place these treasures can be found by every living person in every land who follows The Success System That Never Fails. Do you know where the hiding place is…?
TODAY IS THE DAY FOR YOU TO GET STARTED… DO IT NOW
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