Investment, Coding and Actuary

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Trading as part of the spiritual practice

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I was reading something very classic and inspiring on the Fool. The following contents is partially quoted from the website.

2 must have traits to be successful

Timeline

Investing in stocks requires a minimum five-year time horizon. It can be hard to be a long-term investor in a short-term world — which brings us to the second secret ingredient for investing greatness.

Temperament

Successful investors have the ability to remain calm and levelheaded when everyone around them is freaking out. That mindset makes the difference between investors who consistently outperform the market and investors who get lucky for a while. When a group of business-school students asked Buffett why so few have been able to replicate his investing success, his reply was simple: “The reason gets down to temperament.”

But how? The article goes on and give us some advice on how to keep a cool head.

  1. Memorize this affirmation:

I am an investor; I am not a speculator.

  • Buy stock in solid businesses. We expect to be rewarded over time through share price appreciation, dividends, or share repurchases.
  • Don’t time the market. And we certainly don’t speculate when we buy stocks. Speculation is what Wall Street traders do.
  • Focus on the value of the businesses we invest in. We try not to fixate on the day-to-day movements in stock prices.
  • Buy to hold. We buy stocks with the intention of holding them for long haul.
  1. Tune out the noise: Put down the newspaper, turn off CNBC, and stop clicking that. And that. And, yes, that too. None of it is doing you any good.

Fixating on the market’s minute-to-minute news won’t help you make your next brilliant financial move. At best, all the hours, days, and weeks spent soaking in sensational stories will yield a few timely bon mots to toss off at the next office happy hour. Mostly, though, it’s all noise, and it’s costing you a serious amount of sound sleep — and maybe even some actual money.

  1. Spread out your risk: In order to get some quality Zs, you need a solid asset-allocation plan — meaning a portfolio with a bunch of investments that don’t always move in the same direction. You need to diversify.

Now I do recall the time when my friend asked me to join his trading venture as he said “You got the cool to be a investor.” He must have got it from somewhere else. Anyhow the rule applies.

This reminds me of the article from Reuters on meditation for traders. Some trader/blogger around the Internet also adopt it and move it to the mantra level of it, like this one.

Ray Dalio, named among 100 most influential people by Time in 2012 and 55th most richest person in the US, is a practitioner of transcendental meditation. He spoke in a very inspiring interview below.

<p><a href=”http://vimeo.com/50999847″>Ray Dalio on Meditation</a> from <a href=”http://vimeo.com/meditatio”>Meditatio WCCM</a> on <a href=”http://vimeo.com”>Vimeo</a>.</p>

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Author: jam3sch3n

An actuarial student with a keen interest in investment and coding.

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