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MarketLife Ep 29 – The secret of long-term investing (and how to do it well)

Podcast-Cover300Much of my work is focused on active trading and management, but this podcast takes a look at some important ideas and principles behind long-term investing–the secret of long-term investing, if you will. That secret is to usually do nothing, but to do the right thing when it’s time to act. Easy to say, but not so easy to do. This episode will give you some insight and some tools to start using today in your personal investing and planning.

If you enjoy the podcast, I’d like to ask you to take a few moments to give the podcast a quick review on iTunes here. A review is very helpful to me, and helps new people find the show. Thank you!

Here are the show notes:

  • Be humble and realistic about limitations
    • Markets are very random
    • Human behavior tends to be wrong, especially at critical points
    • You’re neither as good nor as bad as you think you are
  • Understand the goal
    • To have more money at a point in the future than you do today
      • Balancing capital preservation vs. seeking returns
    • Secondary goal: for this to be as easy and “hands off” as possible. To sleep well.
  • General principles
    • Have a plan
    • Start early and be consistent
    • Separate investing from trading—two different buckets
    • Capital preservation: buy real “things” that are probably going to be around
    • Understand what you’re buying
    • Focus on stocks
  • Offensive strategies
    • Dollar cost averaging
    • Indexing
    • What resolution? National? Sector? Individual stocks?
    • The secret to long-term timing: “Buy when there’s blood in the streets” (but don’t sell.)
  • Defensive strategies
    • Manage your biggest risk: yourself
    • Become an intelligent consumer of financial media
  • Things to not focus on too much
    • Taxes
    • Diversification (Mutual funds, ETFs already do it. Done.)
    • Hedging
    • Timing
    • Valuation
    • Don’t sweat the small stuff. It’s all small stuff.

Also, if you like the music for this podcast, then be sure to check out Brian Ashley Jones, my friend, and a fantastic guitar player and singer-songwriter.

Enjoy the show:

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AdamHGrimes

Adam Grimes has over two decades of experience in the industry as a trader, analyst and system developer. The author of a best-selling trading book, he has traded for his own account, for a top prop firm, and spent several years at the New York Mercantile Exchange. He focuses on the intersection of quantitative analysis and discretionary trading, and has a talent for teaching and helping traders find their own way in the market.