Short Sharpe Scary

| February 12, 2018
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I am not saying the resent move lower will not leave a mark, I am just trying to stress that it is all part of the process.

Human beings are not wired to be rationale investors, thus like any physical task you must practice training that 3 pound mass in between your ears.

One of the key themes of behavioral finance is that our investing brains often drive us to do things that make no logical sense – but make perfect emotional sense – at the time.

This just makes you human. We all can’t be great investors like Warren Buffett.

Our brains were originally designed to get more of whatever would improve our odds of survival and to avoid whatever worsened the odds.

Thus we are literally wired to shun whatever seems risky, like a drop in the stock market.

If you are not used to down weeks, get used to having them.

Volatility is NORMAL.

Just Breathe.

And ask yourself this: Can you control the markets or interest rates? Of course not.

You can control your actions to the recent stimulus of market events.

Remember ICE: The Investor Character Equation of Stimulus + Response = Optimal Outcome

If we want to change a habit, we have to change the way we respond to our thoughts. Notice I didn’t say we have to change our thoughts, rather we have to change the way we respond to our thinking.

 

Stay Tuned, Disciplined & Patient! {TJM}

The Investor & Character Equation (ICE) | S + R = O

 

Disclosure
Please remember that past performance may not be indicative of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by Meyer Capital Group), or any non-investment related content, made reference to directly or indirectly in this blog will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful. Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this blog serves as the receipt of, or as a substitute for, personalized investment advice from Meyer Capital Group. To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing. Meyer Capital Group is neither a law firm nor a certified public accounting firm and no portion of the blog content should be construed as legal or accounting advice. A copy of the Meyer Capital Group’s current written disclosure statement discussing our advisory services and fees is available for review upon request.

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