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There is more to it than just money

December 9, 2009
3 people like this post.

Maybe you can now understand that there is more to investing than just making money. It is an ongoing journey and transition process of acquiring new skills and improving them.

Sure, you could say that the same applies to golf, gardening or stamp collection but few other environments provide the magnified pressure cauldron such as the markets in which to execute learned mental skills under the pressure of losing money. The pressure is self induced by magnifying the perceived importance of money. Perceived or not, when you mix people and money the pressure is on.

One of the most satisfying outcomes of providing trading methodologies to and coaching active investors for many years is the feedback that has been provided by many that have successfully transitioned their active investing paradigm. Just about every person that comes to the markets does so to make more money, their primary motivation is growing their money.

However, when I have long discussions with customers that have become and then remained mechanical active investors for many years the most important things to them in hindsight is not the making of money through outperforming the market indices, the important things to them are:

• overcoming fear through trust (in an edge),
• creating investment processes and then surrendering to those processes,
• accepting and being at peace with outcomes of individual trades through focussing on the process,
• having no expectations for individual trades,
• believing in probabilities and thereby overcoming the uncertainty of individual trades,
• overcoming their biases that are harmful to investing in the markets, instilled through many years of living    in society,
• overcoming the “noise” that surrounds the markets propagated through newspapers, newsletters, TV shows,    radio shows, advertising, spruiking and many other sources.

These investors have learnt that you cannot trust and fear at the same time. If you are fearing you are not trusting and if you are trusting you are not fearing.

There is more to it than just money. The benefits of transitioning how you think, feel, say and do go way beyond just making money.

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3 people like this post.

Comments

  • Jan says:

    I have just completed my first year as a complete novice to the share market and what a year to learn in. my first shares purchase where the day before the market crashed……………… but your comments are so right I am on a journey and the new skills i am learning will be with me for ever I look forward to a journey that will teach me the skills to become a good trader. Making money is the bonus!

    Thank you for all your articles I look forward to reading them

  • Dave M says:

    Hi Gary

    As a newish customer I read with interest your journals, which help to me to get my head around the processes you espouse. In this Journal the penny is dropping and I am becoming more confident to let go and let the system run. I have been holding back for the reasons you have frequently highlighted. It is a big step and change in my behaviour to sublimate my human instincts to intervene when the going gets tough and trust the “mechanic”, assuming that the rules of the game can be trusted.

    Am I convinced? Getting there and the pre and post GIC ASX trading looks like being the ultimate test having seen the extremes of the market unfold. My trust in the buy and hold financial “pro” advisors I previously engaged utterly failed me. I am well on the way to accepting and trusting that SPA3/GPS with me at the helm is a more reliable platform for financial growth.

    I am determined to stay the course, your encouragement continues to motivate, keep the fire burning.

  • Lucas says:

    After both winning and losing, I now realise that the joy is in the process. If you can get to the point where you have enough confidence in the process to enjoy it and trust it, the outcome can take care of itself
    Lucas

  • Graham says:

    In many ways an average computer-literate 10 year old would make a better trader (of a mechanical system like SPA3) than most adults. The reason is that the child would (hopefully) not yet be “infected” by the dross served up by mainstream financial media, would (again, hopefully) not have an ego that needed constant positive reinforcement, and would happily not second-guess a system that has been proven to him/her to make money. Even my seven year old daughter can focus on a necessary task when a almost certain reward, such as a particular Christmas present, is on offer.

    The challenge for SPA3 users is to ignore the noise and work on perfecting the process. One idea is to do as Nicholas Darvas did. From chapter 10 of his book: “I buy a copy of the afternoon paper that contains the Wall Street closing prices. I tear out the pages giving that day’s quotations and throw away the rest of the financial section. I do not wish to read any financial stories or commentaries, however well-informed. They might lead me astray.”

  • Wayne says:

    How true your latest article is, I have been on this journey for about 18mths trading CFD’s, it certainly has been a rollercoatser ride, have had some nice wins and losses to go with them. 18mths on I no longer have the same emotion attached to winning and losing, it is purely an outcome. obvioulsy we all like to win and winning is better but losing is something I dont feel bad about like i did in the beginning. As time goes on I am still honing my skills and eagerness to get into a trade, and looking for something that will give me the “edge” you talk about. I look forward to your next blog posting.

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