Don't Be Greedy and Stop Faking Success: 4 Things All of Us Can Learn From Watching the Markets
We often talk about "the markets" as if it were collectively a living, breathing entity. What does "the market" think about the latest jobs numbers? How will "the market" react to the Federal Reserve's latest minutes of the meeting? Or, if you're golfer and entrepreneur Greg Norman: What do golf courses have to do with "the market's" behavior?
Why do we describe the markets in such human terms? Well, because markets do behave a lot like people. They're irrational in the face of facts. They're foolishly optimistic in times of crisis. They experience tremendous highs and painful lows. And sometimes, markets can teach us a thing or two about life.
- There's always a bottom and a top: In life, you never know when you've hit bottom until after you've started climbing out of it. On the flip side, when you're riding high, you won't know when you've hit your peak until you've started falling from it. Markets are the exact same way. The key is not to time these things, but to devise a long-term strategy that works for you.
- You can't fake success forever: When everything is going up, everyone looks smart. Only when things come crashing down do the markets separate the winners from the losers. The same can be said in life—you don't really know who's got the mettle until adversity hits.
- Greed can make you do stupid things: Bubbles, anyone? Markets are guided by fear and greed—but mostly greed. Greedy markets pay silly prices for silly companies. Before long, everyone is getting high—until someone like the Fed rolls in and stops the party. Watch out for greed—it'll prompt you to make stupid decisions and do stupid things for your business and to your family. Any decision borne out of greed will eventually fail.
- Life goes in cycles: Just do me a favor and pull out a 100-year Dow Jones Industrial Average stock chart. Or better yet, click here. Look familiar? Yeah, basically it's your life. Like the Dow, your life improves over time; but you'll hit plenty of bumps along the way. In the long run, you'll come out on top—but only if you keep your eye on the prize and don't go to pieces over a temporary lull. Markets go in cycles, and so do lives.
Long story short: the markets are full of wisdom that you can apply to your own life. Just don't go all Wolf of Wall Street on us.
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AAA at Social Security Administration
8 年Terrific advice, especially item #4. Thank you for posting.
dipolmatic affairs
8 年really every one can learn but not every one has the ability to do so and should be given a good help with a certain type of learning and patience i think you understand me as some people thinks they are the best and won't allow others who's a bit backwards and has some difficulties does not let these kind through.
interesting perspective but it's so true. Thanks for sharing!
Director, John Robson Program for Business, Public Policy, and Government at Emory University - Goizueta Business School
8 年These are such wise observations, presented in an expertly succinct way. I'm glad that I subscribe to RADIATE.
Claims Representative at Social Security Administration
8 年You have it... this is our lives, our businesses, our realities... the parallels are amazingly correct... Too much of a good thing is never a good thing...