These days I’m feeling all right
’cept I can’t tell my courage from my desperation - Bruce Springteen (Local Hero)
When the stock market is volatile and the economy is dragging, you’re mind can be at ease if you stick to investing in index funds and not attempting to claw back all of your losses with the next great stock pick. Because when you are down big due to your stock picks, you are more inclined to take big bets to get yourself back on top (just ask any big bank…).
How do you make your money work for you?
Invest it. Receive interest. Accumlate dividends. Gain capital.
When wise people talk investing, for the majority of us they are talking index funds. Don’t time the market. Don’t try and pick winners and losers. In order to truly make money on your own picking stocks, you need to know the market every-which-way and very few people have been able to do that (do you really think you’re the next Warren Buffet?).
And the beauty of index fund investing is that when the market is down, you just stick with your system. Invest on a schedule and let the market sort itself out. Or you could do the alternative and pick stocks that look hot based upon intense analysis during your lunch break… But is that conviction based on courage?
Or desperation?
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