Where is the market headed?
Should you book your profits now?
Is it a time to be buying or selling?
I am asked these questions on a regular basis, and the problem is ‘I actually do not have an answer’.
I am as helpless as any of you, but I am sure about one thing. To make money in the long run, I need to control my behavior and not have to worry about what the market will do in the short run. I am not standing for any election, and so the voting machine does not matter.
In the long run I need to get healthier and fitter – and that can come from a good diet and exercise. Of course if I do not have the discipline to do the right things, I will suffer, AND I KNOW THAT.
Frankly Iam also on the same side as Peter Lynch and I do believe that if you spent 10 minutes to discuss the macro, you have wasted 8 minutes.get
So instead of worrying about what the market will do, concentrate on 3 things.
Learn how much is the inflation as applicable to you in your life. This can happen by tracking your major expenses, and your day to day expenses. So if you take annual vacations that has to be priced in. If you travel abroad, that has to be priced in. Get realistic about your monthly, and annual expenses. Inflation applicable to your life could be 12-14% p.a. and not 6% as you read in the pink papers or watch on television.
See how your asset allocation should be to achieve a REAL RETURN on your TOTAL portfolio. It is not easy.
If you are finding it difficult to get a real return, you need to concentrate on SAVING MUCH more, and changing your asset allocation. Both of this is difficult, and takes time to do. Hey, you have no choice.
Learn about compounding. Yes it is not too late to start. At least let your younger siblings and progeny learn from your experience. Show your son or daughter how compounding works, learn the magic and show the magic.
Estimate how much money you require for your goals. Remember start allocating to the MOST IMPORTANT goals first. That means your RETIREMENT BASKET. It is the biggest asset of your life – it is that ‘box’ from which you have to live about 30 years of your life.
Oh you think you will live to 105 years?
Ha. Now you are getting realistic.
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