Contact Us Disclosures Blog
 
Make an Appointment Contact Us Podcast Blog
Market Commentary Audio Archives Book Shelf InvestAbility Center

Thinking Ahead

November 30, 2012 – 4:49 pm

We all know by now the stock market is like a spoiled child when looked at on a day to day basis, but in the long term it is very rational, pricing stocks based on earnings and growth of earnings. Our society has been focusing on the short term for so long many forget that planning for events in life with short term thinking leads to ruin, and this is particularly true when it comes to investing.

Cases in point: the fiscal cliff which is all about short term planning, the stock market day traders which lead to a massive loss of wealth as did the dotcom bubble burst, the financial meltdown and the housing bubble. All of which were due to short term thinking.

It is in our nature to seek out immediate comfort, profits and happiness. It is also in our nature to plan for the future as we all know that is for the best. The problem we have is that short term thinking gets in the way and distorts rational thinking.

There is a great lack of rational long term thinking in Washington and the media. They push the immediate gratification agenda constantly. If you want to be successful in life fight that impulse. Stock prices have always gone up over long periods of time. They will do so again and again but long periods are counted in years not days or weeks or even months. Invest for the long term.

Good Trading
Steve Peasley

Post a Comment