Gaining Control Over Your Investments – Part 4 of 6

The tale of the “Tortoise and the Hare” is taught to us at a very early age for a very good reason. Slow and steady wins the race. Yet, the majority of investors forget the lessons from childhood, often opting for flashier paths that might bring them enormous fortune. Sadly, the quest for a magical formula or a “stock market guru” typically ends in disappointment, if not disaster.

Magical formulas in the stock market do not exist. Stock market gurus do not exist either. Nevertheless, we are constantly bombarded with “get rich” publications, TV shows about making “mad” amounts of money, as well as industry profiles that crown individuals with mystic investment skills.

The purpose of this article is not to tar and feather several of those “hot-to-not” individuals; rather, it is meant to make investors aware of their natural—and quite hazardous—urge to chase performance, hop on band wagons, and place blind faith in a stock market guru.

Bill Miller:
Bill Miller co-managed the Legg Mason Capital Management Value Trust Fund (LMVTX) from its inception in 1982. Over the years, Mr. Miller and his team received numerous accolades for their performance record and distinct past performance . But when a “guru” does not have a plan to minimize losses, it’s the buy-n-hold believers who lose.

Smart Investing:
The world is filled with very intelligent men like Bill Miller and John Paulson. Yet the smartest investors understand that they themselves, as well as their heroes, will be wrong. It takes humbleness and a keen understanding of human nature to develop a plan to protect yourself from being wrong. In other words, you need a plan to protect yourself from yourself. Otherwise, things can get real ugly, real quick.

Disclosure: Gary Gordon, MS, CFP is the president of Pacific Park Financial, Inc., a Registered Investment Adviser with the SEC. Gary Gordon, Pacific Park Financial, Inc, and/or its clients may hold positions in the ETFs, mutual funds, and/or any investment asset mentioned above. The commentary does not constitute individualized investment advice. The opinions offered herein are not personalized recommendations to buy, sell or hold securities. At times, issuers of exchange-traded products compensate Pacific Park Financial, Inc. or its subsidiaries for advertising at the ETF Expert web site. ETF Expert content is created independently of any advertising relationships.