Investing wisdom born of experience


Maturity is all about achieving full development.

The quicker one is able to approach life in a serious, analytical and thoughtful way, the more one is judged to be mature in my opinion.

As people grow older, they typically learn to reduce those actions which won’t help them.

 

 

investing

 

 

Some individuals are better at learning from their lifelong experiences and leveraging that information in a useful way.

Others, even at an advanced age, never seem to draw on their various experiences to help themselves.

 

Staying Humble

In my view, the concept of maturity is a very important part of investing.

I’ve learned that nobody is correct about every investment they make. Indeed, far from it. If you are right more than you are wrong, you are probably doing pretty well.

A huge aspect of investing is learning as you go, and building upon what you have previously experienced.

 

Market Lessons

There are some who believe the best thing that can happen when you first start investing is to lose a big portion of your money, especially if it is only a small amount.

In doing so, a person will realize how difficult the task is and that a loss of capital is a distinct possibility.

Markets have a way of humbling you, and if you can learn from these experiences, in the long run they can work to your benefit.

 

Volatility

As you’ve probably observed, the stock market in 2018 is far different than last year.

Volatility has increased dramatically and the daily swings of two hundred or more points have become the norm.

Company earnings reports can lead to massive swings triggered by a CEO comment that wasn’t well thought out, or taken in the wrong context by the investing masses.

In my opinion, it requires maturity to look past one data point, adopt a longer time horizon and act appropriately depending on the circumstances.

 

Big Oil

For example, the largest integrated oil companies recently reported divergent results.

Royal Dutch Shell (RSDA) met estimates, Chevron (CVX) exceeded production numbers, and ExxonMobil (XOM) disappointed.

One can choose to focus on one of the companies and draw a conclusion about investing in energy.

Or you can evaluate all three in total and you might come to a different assessment.

 

Takeaway

I would submit the latter is probably appropriate.

But the point is, in my view, is that investors need the maturity and experience to choose which approach is best suited to their investing goals.

Of course, I bet you were mature enough to have figured that out already.

Photo Credit: Nathalie via Flickr Creative Commons

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Yale Bock
Yale Bock
Y H & C Investments is a registered investment adviser based in Nevada. Yale Bock founded the firm after 15 years of experience as an individual investor. Yale also manages the secured lending operations of a family-owned business.