The average investor I talk to wants to be like Warren Buffet. For those who don’t know who Warren Buffet is, he’s the current king of ‘Buy and Hold’ Value Investing.
Then the average investor tries to copy Warren Buffet by adopting the principles of value investing; buying when prices are low, holding onto their investments forever, using fundamental analysis to pick the best value plays.
It’s very similar to copying Tiger Woods at golf, Roger Federer at tennis, Lebron James at basketball, Warren Buffet at Value Investing.
The reason why you can’t copy the results of these masters is because their success is predicated on a few factors; talent, physical and mental ability, discipline, access to other masters, training, environment and opportunity.
You need all of the above characteristics and conditions to succeed in anything in life.
You just can’t borrow some of their characteristics to succeed. You need the entire process, the secret recipe and time spent with the master in a mentoring program.
Do you ever wonder why other Portfolio Managers under perform Warren Buffet?
That is because they didn’t study under him and they are just guessing at the tools and processes Warren Buffet uses.
If professional portfolio managers (they actually went to school for this, MBA and CFA designations) can’t figure out the secret recipe to value investing then why do you consider yourself a value investor?
So let’s throw out the idea of copying Warren Buffet, you can’t do it and others with more time and money than you have tried and failed.
So let’s start with a new take on investing and we will learn from everything we already know in life.
Conventional wisdom says that you can’t time the markets.
Try telling that to the high frequency traders that make a ton on short time market timing. Or the countless number of Hedge Funds that use quantitative analysis to generate returns.
Conventional wisdom also says to use fundamental analysis.
Then why do 66% of all portfolio managers fail to beat the market index.
They tell you that ‘time in the markets is more important than timing the market’. If that is the case then why can’t they beat the market average?
Forget about conventional market wisdom because it produces poor results.
We all know that TIMING is one of the most critical factors in success.
Timing dictates who you marry.
Timing determines if you safely cross the street or if get hit by a car.
Timing determines if you make juicy steak or burnt meat.
Timing determines if you make the play in sports.
Timing determines who wins the race.
If timing is so important in pretty much everything in life then why does conventional financial wisdom tell you to ignore timing in the markets?
The real question is how can you incorporate timing to help you improve your returns in your portfolio?
Click here to find out how to incorporate timing and greatly improve your returns as a buy and hold investor.
Originally published at BehindWallStreet.com
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