The Huge Trap for All Investors
Posted on August 01, 2012 at 14:51 PM EDT
The dollar is on its death bed. Stocks are due for a huge pullback. The government is broke. Europe is (literally) burning. China’s growth is slowing. More baby boomers exit the workforce every day. Unemployment is high. Growth is weak. We’re running out of oil. And we’re in a constant state of war. But these large trends won’t make you rich or poor, necessarily. They might not even matter to you, personally, at all in the long run. The world’s best investors don’t care much about these trends. The Warren Buffetts and Peter Lynches of the world don’t care about peak oil or the death of the dollar . They don’t care about a pullback in the S&P 500. They barely pay attention to unemployment, or real estate prices or growth in China. Because they buy individual investments and assets. And they buy them when they like the price. It’s a big trap to look at macro issues and to invest accordingly. I buy gold, yes, because the dollar is in trouble – but I buy it because the price is attractive and its utility has the potential to exceed that price. These macro issues are a trap even for me. I read headlines. I keep tabs on Europe. I pay attention to unemployment. And these issues can make everything seem bleak and impossible. But people still need to eat, and drive to work and raise their kids. They need to take showers and throw out their garbage and finish their basements. People need a place to put the money they’ve earned. And on this last point, I hope you won’t look at the world around you, and the big-picture issues, and ignore the small opportunities. Standing pat in safe securities because you’re afraid to buy a single stock or that second home or a new car means missing out on the real, compelling chances to build your wealth and enjoy your life. Remember: fear is for children. Children don’t understand the world very well. They have a tendency to make big issues seem impossible or daunting beyond imagination. But we’re adults. Adults are supposed to put problems in perspective – to understand that an inability to control everything doesn’t mean you should do nothing. So I’d like you to try something. I’d like you to buy that stock that you really have thought about buying. I’d like you to bite the bullet and buy some gold or silver if you haven’t already. Take a look at the investment world not as a thermometer that plunges or skyrockets according to the news of the day – but look at it for what it is: a collection of opportunities. Some good. Some bad. None very integrally aligned with macro issues.
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