How To Reach Your Financial Goals is to Earn Inflation-beating Returns?

Your strategy to reach your financial goals is to earn inflation-beating returns for a long-long time with the help of Mr. Market. How? By following some commonsensical guidelines and not trying to outsmart Mr. Market or by trying to know him enough to predict his behaviours. Here are the important characteristics of Mr. Market and the guidelines based on it that define your strategy.?

1. Mr. Market keeps swinging between two extremes like a pendulum but you cannot predict when the pendulum will change directions or how far it will go in one direction. However, the further it goes in one direction the greater the forces that are pulling the pendulum in the other direction. So eventually, it will change direction. But remember: Eventually, we are all dead. Don’t invest based on predicting how the market will move. ?
2. In the short-term Mr. Market behaves live a voting machine but in the long term, he behaves like a weighing machine. Remember voting machines elected Trump, so anything can happen in the short term and is impossible to predict. Investing based on the voting machine type of market behavior is also called the Greater Fool Theory way of investing because success depends on there always being a bigger fool who will buy the stock at the irrationally high price and you not being that fool. While I think the first part is pretty correct there is no guarantee for the second part.?
3. However, after the rush of all the irrational things happening, Mr. Market makes a more rational assessment, it literally weighs the worth of every stock and offer a price based on this. Basing your investing on Mr. Market’s weighing machine behaviours is more likely to yield success.?
4. Mr. Market doesn’t care about you personally. The market will not be high when you need to sell and low when you want to buy. You need to keep your options open when you need money and not be dependent on Mr. Market for this.?The power to stay invested even in the most difficult times is necessary to reach your destination. Therefore, you should never put all your money in the Market. ?
5. When Mr. Market whips up a storm, every ship and boat is tossed around. The best ships get back on course the fastest but the weaker, smaller boats can sink and be lost forever. Having a fleet of small boats does not make a strong navy.?

In Investing language, the 4 guiding principles to earn inflation-beating returns for long, really long, as long as your goals require you to are as follows:?

1. Don’t try to time market or predict the market.
2. Invest based on fundamentals, the real worth of the stock- the fair or intrinsic value of stocks and not on the Greater Fool Theory Way of investing.
3. Don’t put all your money into Equity; put some in safer, predictable investments. This is called Asset Allocation. This will give you the option to fund your goal should the markets be really down when you need the money. Also, it prevents you from anxiety attacks when the market is irrationally down, instead you can add equity at very attractive discounts.
4. Diversify – Build a strong portfolio -with strong company stocks and only a few small ones that are promising.

Or your strategy in simpler English: Split your investing into equity and safer, fixed-income assets (FD-like) to earn inflation-beating returns overall. Build a diversified portfolio of strong company stocks using their intrinsic value based on fundamentals as an anchor to invest in them. Keep investing regularly and don’t time the market. Stay invested till you need the money to fund your goal.

If you are still reading, I believe that you are interested to know more. To get a more detailed understanding on investments, read the book: How the heck to Invest and Reach Nirvana by Raymond Moses for FREE (offer for limited days).???????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????