Today’s Take: Get your nose off the glass!
What do you see in the picture below?
At first glance, it looks like a lampshade to me.
But when you view the picture from a distance, you get a much different perspective:
Georges Seurat’s A Sunday on La Grande Jatte
That “lampshade” turns out to be a little girl walking with her mom on a beautiful day near the shore.
Everything changes when you stop looking too closely…
Take a Step Back
The same thing happens when it comes to the markets. It all depends on how closely you’re looking at it.
If your nose is pressed against your computer screen and you’re watching every wiggle and jiggle of a stock’s price swings … you’re missing the big picture.
Looking that closely, a few down ticks could look like the start of the next Great Depression. But when you look at them with a longer-term view, they become less important.
For example, back in October 1987, the stock market plunged more than 22% in just one day! After that drop, many investors swore off putting another nickel in the market ever again.
Monthly, weekly, daily and certainly hourly charts of stock prices at the end of 1987 looked scary as heck:
But take a look at a longer-term chart … and the 1987 crash looks like a tiny blip!
Having the proper perspective makes all the difference on how well your investments will do.
It’s natural for the market to move up and down. Sometimes, it’s for no apparent reason. Stocks will nosedive or soar higher just from a headline. That’s what stock prices do.
Charlie Munger, Warren Buffett’s business partner, put it this way…
In 2008, Berkshire Hathaway’s stock fell by 50%. And when asked how much concern he had about it, Munger replied: “Zero.”
He said that only investors who “can act with equanimity are fit to be shareholders.” If not, “they deserve the mediocre results” they’ll get.
So, if you’re looking at stocks through the lens of a microscope — the five-day view — you’re setting yourself up for mediocre results.
But if you use the lens of a telescope — looking at a five-year view instead — investing becomes much simpler…
What You SHOULD Be Doing Today
You get to choose.
How do you want to view market noise?
Do you want to panic-sell at every downturn? Or hold on for long-term profits?
To me, it’s a no-brainer: Investing over the long term is easier.
There are no distortions. You don’t see a lampshade. You see the whole painting.
That’s why I stress patience and a long-term outlook in my Alpha Investor service.
And it works. Our model portfolio has several open double- and triple-digit winners with an average hold time of just over a year.
Not only are my readers a whole lot richer … they’re also able to sleep better at night and have peace of mind knowing their money is working for them.
Now, I’m on a mission to help as many everyday investors just like you — possibly even 1 million or more — achieve this same peace of mind, along with profits.
That’s why I’ve been hard at work on a brand-new project. I’m calling it the “Miracle on Main Street.” And I’m launching it to help you reclaim financial freedom.
I’ll be revealing all the details next Tuesday, June 15 at 1 p.m. ET. So, be sure to mark your calendars.
Founder, Alpha Investor