This past week the bull run in the stock market marked its six year
anniversary. For six glorious years the market has been chugging ever
upwards, recovering quickly from every dip, and setting all-time highs along
the way.
For most investors this has been a wonderful time
to be in the market--the salad days you might say. So how has this six
years been for you? Are you
getting what you want from the stock market?
That may seem
like a strange question to ask but sometimes we forget why we are in the market
in the first place. To make money. That is it. And if you are
not making money in this market, or not making as much money as you think you
should, maybe you should ask yourself why?
When I was younger and very green about investing in the stock market, I
hooked up with an online community on the Prodigy Network. It was full of
traders and investors and some, like myself, were very new to the game, while
others were seasoned professionals with decades of experience.
This was way before the Web 2.0 and social
communities like Facebook and Twitter and we would exchange ideas and technical
strategies through the Money Talk Bulletin Board. The
group grew to about 50 people and eventually we decided to have real live
meetups around the country.
At the first meetup in Biloxi, Mississippi, I met a member by the name of
Tim (which is not really his name since I don't want to embarrass him if he is
still
Tim was a really good guy, with his own
successful business, and had just started to get into the stock market, having
read some of the classic books on trading and investing.
I
remember how fascinated he was with the market and how he soaked up all the
information at the meeting like a sponge. Year after year, whenever I
would see him at our annual meeting, it never failed to amaze me how much he
had progressed since the previous year. It even got to the point where he
was giving detailed presentations to the group about all sorts of market
topics. I thought he might actually end up becoming a legendary trader.
But then one year I
showed up and Tim wasn't there. Nobody knew why and nobody had heard from
him, which I thought was odd. After the meeting was over, and I arrived
back home, I found his phone number which he had given me a while back, and
gave him a call.
He was surprised but
glad to hear from me, and we chatted for over an hour. It was then that I
found out that in all the years I knew him, Tim had never been profitable in
the stock market. True, he knew a ton about the market and trading, but
that didn't translate into profitability.
When
I asked him why he thought that was, he was very honest. He told me that he got
so caught up in the mechanics of the market that he had forgot what it was
about--making money. He spent so much time doing analysis, reading
financial publications, reviewing charts, talking with other traders, posting
on bulletin boards, trying new programs, and such, that he thought that was the
point.
For all intents and
purposes he was a trader, and an active market participant, who could talk a
good game at parties, but he didn't make money.
Tim told me that he
skipped the annual meetup because he was going back to the basics and cutting
out everything that wasn't directly related to making money in the market.
And if you have not made money in this bull market over the last six
years, you might want to ask yourself if Tim's story sounds familiar.
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