Here's how millionaires get rich by handling their investments: they trade sparingly and invest for the long haul. Key thoughts from this post I wrote one year ago today include:
Most [millionaires] don't follow the ups and downs of the market day by day. Most don't call their stock brokers each morning to ask how the London market did. Most don't trade stocks in response to daily headlines in the financial media.
Check out the full article for more details.
That makes perfect sense; I think the people who call their brokers each morning to find out how London did are either afraid of the internet or have so much money that they're investing all over the globe that they need to call their broker to find out what's going on. In which case they're probably good friends with their broker.
Over time I've come to realize that the long haul is what's important.
Posted by: Matt | October 24, 2006 at 06:04 PM
I use to do a lot of trading. I was even into options trading, selling covered calls, and a lot of day trading. You can win big and then you get really confident and you start to trade bigger positions of stock and then you get a major down day or down week. So the ups are great and the downs can be really bad. I also ran out of time, my job has become more and more demanding and I travel about 25% of the time. Therefore, you end up not having enough time to watch the investments. I have since switched to using a financial planner. I figure if I would have earned 5 to 6% on my investments over the last 5 years I would have been way ahead. Instead I am still writing off my capital loses from times when I made large bets and things went wrong.
Posted by: Bob | October 24, 2006 at 09:18 PM