The Hamster’s Guide to Investing
Imagine that you’re a hamster. All day you’re stuck in a little plastic box, your only entertainment a wheel that you can run or not run on.
Running on the wheel releases bursts of endorphins that make you feel a little better, but once you’re done, you’re still stuck in a box. A box that is damn hard if not impossible to break out of. You’ve got to admit, being a hamster sucks.
At least you have your Ratatouille plush toy to keep you company through the long, lonely nights.
Why hamsters can’t invest…
It should be painfully obvious to you that hamsters don’t have what it takes to be a good investor. Besides wasting all of their energy running around on a wheel all day, their pea sized brains just can’t absorb the knowledge necessary to become a master investor.
What’s surprising, however, is that the things that hold back investors are common traits to most hamsters:
1. They accept what’s fed to them
Many investors accept the investing advice of so-called ‘experts’. Whether analyst’s stock recommendations or the recommendation of a given firm’s ‘top performing mutual fund’, many investors blindly trust the ‘experts’, no matter what crap is being fed to them.
2. They never step outside of the wheel
At the other extreme are the investors who think they have found THE answer, low cost index funds, and stick to their strategy & philosophy no matter what other alternatives present themselves.
These hamsters, I mean investors, will be better off than the first group in the long run. But they dogmatically stick to the idea that their solution is the only one, in spite of any evidence to the contrary. While the wheel such investors stick with isn’t stuck, it sure does move slowly.
To a hamster stuck in a box, a wheel IS the only solution to their painful existence. But what about you?
Luckily, you’re no hamster
You don’t have to accept what’s fed to you or keep running on the one wheel in your box. You can break out of it.
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