For many, November is a month most noted for Thanksgiving. The holiday's inspiration came nearly 400 years ago, when about 50 pilgrims and 70 Wampanoag tribal members put their differences aside for a brief time and sat down for a feast. They checked their egos at the door and gave thanks.
The financial market often asks us to do the same. There was no stock market back in the 1600s, but there were the same human emotions - fear and greed. My economic
review this month talks about how these powerful emotions can wreak havoc on an investment plan. Not unlike how the pilgrims or Native Americans had to hunt for food, and if they got too greedy might have passed up on vital nutrition for their lives, the stock market can have the exact same effect.
If we don't think long term and provide ourselves proper sustenance or average returns, we may famish and miss out on a prosperous retirement. It's always best to check your ego at the door, make wise decisions in good times and stick to your plan when times get tough.
The Critical Element in Investing and Winning
In hindsight, it's easy to see that making a long-term financial plan and sticking to it is the best strategy.
But in the moment, emotions can take over.
