How many of you out there think that the market is performing
well?
How many think the market is performing poorly?
And how many feel the markets performance is neutral?
Actually none of these answers is correct. You see, the market
does not perform, you do.
You perform!
Sometimes you perform well, and other times you do not perform
so well. The market doesn't perform, it moves. It moves up, it
moves down and it moves sideways.
It moves along like anything else that travels in a business
cycle. If the market did perform, then you would only be able to
make money in an up market.
As you know, it is possible to make money in a down market, and
even in a stagnant market.
Thus it stands to reason that the market simply moves and you
react to it. So, let's talk about your performance. You have two
ways that you can perform, directly and indirectly.
Directly, you pick your own stocks. Indirectly, someone else
picks your stocks for you, whether it is your broker or a fund
manager.
In the latter case, the fact that you chose someone else to pick
the actual stock does not mean that the responsibility of a loss
is theirs. After all, it was you who chose them.
In the end, it is you and you alone who are responsible for your
performance.
Consequently, it is your responsibility to become an educated
investor.
Years ago, individual investors didn't have to worry about who
was managing their money.
Now, things have changed as poor returns from money managers and
investment firm scandals have shaken our confidence in these
'professionals.'
To get a better look at what lies ahead, you have to go back and
look at what transpired to get you to where you are now. From
there, maybe a clearer path into the future will become visible.
During the Great Bull Market of the 1990's, many investors, like
you, entered the market and reaped the returns of the largest
bull market in history.
Everyone, it seemed, made incredibly high rates of return. The
market's incredible, unprecedented move appeared to make
geniuses of us all - but in actuality, it masked some major
flaws with many industry professionals. It also created a
misconception in the general public that all market
professionals were experts.
Suddenly, the bubble burst and those flaws were exposed.
Not only did we find out that most of those experts possessed
more luck than skill, but we also discovered that some had been
cheating us out of our hard earned savings.
Many investors were discouraged with these market developments,
and to make matters worse, many had lost significant amounts of
money. Not to mention, the prospect of regaining these losses
seemed slim to uncertain, at best.
Furthermore, the very people we normally looked to for help in
retrieving these losses either lacked the talent to recover them
or had lost enough of our trust and confidence that we wouldn't
even entertain the thought of letting them try.
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