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What are your biggest frustrations when it comes to investing?

Discussion in 'Investing' started by Haydn Martin, May 23, 2020 at 6:17 AM.

  1. Haydn Martin

    Haydn Martin New Member

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    I find investing frustrating. Very frustrating.

    I think this is normal, especially when you are young and there is so much uncertainty in your life. This is compounded by the diversity and volume of opinions when it comes to investing. I often find myself pulling my hear out (I have none left now) and changing my strategy every few years or so...

    I boiled it down to my biggest 3 frustrations:

    1. Life gets in the way. Having to liquidate your position because of Xyz f*cks up your strategy/returns.

    2. Data is misleading. Statistics can be manipulated, correlation =/= causation, historic returns =/= future returns, etc.

    3. Details matter but the bigger picture matters more! Things like taxes, charges, etc. matter a lot. But they don't matter unless you have the right overall strategy!
    These are the ones I came up with. I'm sure they will change as I continue my investment journey but these are my biggest pain-points at the moment...

    What are yours?

    (P.S. I wrote about this in more detail on Medium if you want to find out more: https://medium.com/@HaydnMartin_/yo...056b092fb?sk=02bbb98c6cd060bb959c0e9072b0feef)
     
  2. Mark22

    Mark22 New Member

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  3. Haydn Martin

    Haydn Martin New Member

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    Thanks! I've thought about it quite a bit because sadly I find myself feeling frustrated quite a bit...
     
  4. TomB16

    TomB16 Well-Known Member

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    Investing doesn't frustrate me but my point of view is profoundly different. Please, allow em to share it.

    My thoughts on your points.

    1) It sounds like you have taken risks that did not pay off. If you buy a trifecta ticket on a horse race, and the first two horses come in but the third comes up lame, that is not a near win; that is a loss. If you buy a lottery ticket and it "almost wins", no... it didn't almost win. That's a loss.

    Don't bet what you can't lose and understand the risk versus reward you are dealing with. If one company has a 90% chance of returning 10% per year while another stock has a 20% chance of returning 50% per year, the former company is, by far, the better bet.

    2) Lying is part of the human condition. Not only is it ubiquitous, it is necessary. It would not be possible to gain investors after presenting a business plan that is 100% honest. It is easy to gain investors by telling them they will get rich quick, if they give you money.

    Because of this, I ignore a ton of metrics that other investors obsess on. Almost everything, actually. I look at metrics like what management did with their bonuses in 2009. It was the global financial crisis. Did they pay themselves a record bonus? The vast majority of executives did.

    3) This is where our thoughts align perfectly. There are legions of people who work micro-optimizations like they are a secret weapon for success. Of course, they are not. If you are successful, and your fundamentals are sound, you can use micro-optimizations to increase your gains a bit. I do it but it does not drive what companies I want in my portfolio.



    I really enjoy this type of thread because it helps me understand how other people think. It helps me understand what a freak I am. lol!

    A bit of anxiety is not a bad thing. It shows you have the passion needed for success.

    Best wishes to you in the markets and in life.
     
  5. Haydn Martin

    Haydn Martin New Member

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    Thank you very much for such a detailed response. I too really enjoy discussing these types of ideas so it's pleasing to hear there are other people who share this enthusiasm.

    A few quick comments on your points:

    1) I agree with you that when it comes to investing it is better to take guaranteed or near-guaranteed wins because the stakes are so high. The problem is how to get exposure to these types of bets in the long-term and is it actually worth it. My frustrations in this area are more to do with the fact that there is such a high degree of uncertainty over very long investment horizons, with both things that happen to your portfolio and things that happen outside of it.

    2) You are right. Moving forward I will try to ignore most statistics rather than consuming them and subsequently becoming annoyed by them.

    3) Gald you agree!

    Again, thanks for your opinion.
     
  6. Haydn Martin

    Haydn Martin New Member

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    Thanks! I've thought about it quite a bit because sadly I find myself feeling frustrated quite a bit...
     
  7. WXYZ

    WXYZ Well-Known Member

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    Some people with those sorts of feelings........I dont know if this applies to you so this reply is intended as "general" advice.......are just too involved in micro managing their investments. "A watched pot never boils". Perhaps you would be less frustrated if you simply stepped back and did not watch or even consider your investments except for once each year at year end. It is hard to let go and do this but it will help. In other-words go PASSIVE. Invest every month by automatic withdrawal in a SP500 Index fund. This will give you exposure to all the HOT companies in addition to the cream of the crop of the US economy and business world.

    Yes....it takes discipline to NOT touch your account......ever. Consider that money GONE. Have an adequate emergency fund and plan so you do NOT have to use your investment account as a savings account. I dont know about you....but in general what you are describing, to me, is a symptom of someone that wants to be a long term investor, but is behaving like a short term investor.

    Yes, the BIG PICTURE matters, so people need to let that be their focus and NOT obsess over the small picture.....at least until they have established good investing habits. Too many people get all BOGGED down in the details and lose sight of the big picture. Again....this is not aimed at you but is "general advice"...... If you SIMPLIFY and go PASSIVE with something like a SP500 Index Fund....you will achieve a TOTAL RETURN of about 10% over the LONG TERM. YOU will beat most if not all of the professionals.

    New investors or young investors often have an issue with passion on one hand...BUT...on the other hand they have no PATIENCE. To me it is a source of frustration to want the returns and gains BUT not be willing to allow TIME and COMPOUNDING to do the heavy lifting. My comment to any investor.....SIMPLIFY, have the DISCIPLINE to never touch your account, and allow TIME and COMPOUNDING to do the heavy lifting.

    AND YES....it does seem slow and frustrating at first. BUT, over time your account will grow and it will get easier. MORE sayings that apply........"it is a marathon, not a sprint"........"slow and steady wins the race".

    THIS is what I mean:

    Buffett's Bet with the Hedge Funds: And the Winner Is

    https://www.investopedia.com/articl...etts-bet-hedge-funds-year-eight-brka-brkb.asp

    BOTTOM LINE....have the GUTS to NOT emulate those around you. Follow a simple passive approach to get established and in ten years you will be WAY AHEAD of all your active friends.
     
    #7 WXYZ, May 25, 2020 at 10:53 AM
    Last edited: May 25, 2020 at 11:03 AM
  8. TomB16

    TomB16 Well-Known Member

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    Amen, my friend.
     
  9. Haydn Martin

    Haydn Martin New Member

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    Good advice, always worth repeating!

    Doesn't apply to me I would say but there's no doubt that these tactical psychological components make a huge difference for most people.
     

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