Act like a pigeon!
Everyone should try and act like pigeons every once in a while, well at least in some ways, in order to know their limits and to try to recognize different patterns which in fact do not exist.
An experiment was held in which researchers used two flash lights, green as well as red and uses them to flash on the screen. 4/5 times it is going to be green light appearing on the screen while the other one time it is red light. However, the sequence of the appearance of light is kept secret. In order to win the guessing game, best strategy that one needs to follow is to predict that green light will appear, every time you are asked. The reason behind it is that, there is almost 80% that you will be right. This is what pigeons usually do especially when the reward of them guessing the right life is in the form of crumbs of food. When it comes to human, the act different during these times of experiments, as they instead of securing their chance of winning the game by guessing green light, they tend to get caught-up and try to guess when red light will appear.
Despite knowing the advantages of actually doing nothing the human nature makes it extremely different for people to stand still on one decision. The best tip that can help you stand firm on your decision is by adopting the habit of ignorance. Stop checking the stock market every morning. If checking the stock market is extremely important, stick with headlines and try not indulging yourself in the details. It is a common fact to feel lonely among the crowd of investors who are constantly making changes in their portfolio trying to make different guess regarding the position of the interest rates and where they are headed. Reading the temperature of the stock market every now and then can cause curiosity. To be a successful investor it is important that each and every move that you make should be because of a reason not simply out of curiosity. If you want your long term investment to be successful then you need to learn how to turn down an urge to make a move especially when things are going as they are planned.
How doing nothing is good for you?
Being an individual investor is not as easy as it might sounds. An individual investor is usually at disadvantage when he is trading against some professionals or funds manager. However, that is in case he makes frequent changes in his portfolio. An individual investor should simply buy and then hold his diversified portfolio and refrain from making frequent changes. Doing nothing is actually going to help him from losing. A smart investor instead of making compulsive decisions diversifies his portfolio and plays a long game. Do your research and go for the passive investment. Once you have made a decision, sit back and wait for the long term benefits. Ignoring your portfolio is sometimes the right thing to do. Do not buy anything just because it is cheap. You should invest in something that is worth investing rather than going for something that is just low cost at the moment. Under confident investment is going to cost you your money, over confident investment is going to cost you both your time as well as your money. However, doing nothing will cost you literally nothing. You should wait and wait, until you see something that you know is a perfect deal for your portfolio. Until then, just do what is best for your portfolio and i.e. doing nothing!
SAMT ETF enduring core portfolio
SAMT AG offers a portfolio with an enduring core portfolio concept. The main idea is to build an enduring ETF Core Portfolio which shows an optimized risk to return behavior and if the investor needs additional protect the portfolio is hedged with cheap derivatives (Plain Vanilla Options). This technique ensures that a potential uptrend cannot be missed and allows to avoid the high costs associated with the buying and selling of many portfolio ETF (the bid-ask spread).