[...] points out the following about investing: “You are your own worst enemy,” Bernstein writes. The number one impact on your investments is you. He explains that diversification and indexing are the most reliable methods to obtain long-term [...]

[...] As JD from Get Rich Slowly advises, it’s best to return to the basics if the going gets tough. After all, the #1 impact on your investments is you. [...]

[...] Get Rich Slowly reveals the number one impact on your investments. [...]

Holding period. While timing the market is a fool’s game, time in the market is prudent. Based on history, between 80% and 90% of the returns attributable to market performance come from just 2% to 7% of the time in the market. Miss the market’s greatest moves and you’re doomed to under-performance.

In the post, I referenced author, Daniel Goleman, and his book, Emotional Intelligence. Here is a (long) quote from him that I concur with regarding “self-help” books:

“If you do Tai Chi every morning, or yoga, you are doing that with your skeleto-muscular system and perhaps your attention, if you are doing it mindfully. If you are doing mindfulness meditation, you are doing it with your ability to attend to the moment. However, if you are reading a book like ‘The Power of Now’ but don’t do anything about it, you may feel great while you’re reading, but it is not going to help you in the next moment. If you do a practice and train your attention to hover in the present, then you will build the internal capacity to do that as needed–at will and voluntarily.”

Being the pragmatic type, I am not sure I believe it. But that is probably why I’m not rich yet!
Lisa

I totally agree – our investments are ‘us’ in a matter of speaking. One person can take an investment and it will skyrocket while another person will take another investment and it will totally crash. It has alot to do with our point of attraction than it has to do with the investment.

Our hidden wealth files are probably where 99% of the problem occurs – in our unconscious minds. These false beliefs about money hold most people back regardless of what type of action they take. For more, see:

How to Change Your Beliefs with Praxis, Part 2
http://www.stephenmartile.com/?p=108

I think few people who do what you do are able to write so well about it. Congratulations on another well written article.

Thanks for the guest post opportunity! Your personal story is quite interesting. I wonder if GRS would exist if you had not found your “path?”

Aaron:

For many people, it is easier to discover who we are NOT before we discover who we are…

Philosophers are known for voicing their opinions and, quite often, the most notable thinkers are quite eager to disagree or contradict other philosophers and ideas.

There is no doubt, however, that finding philosophies and ideas that “speak” to us can bring more clarity to who we are. That self-knowledge, in turn, further clarifies who we are not…

KC:

You’ve defined “media noise” quite well!

Brad:

Thanks for the compliment! I am an INTP (extremely in each of the four)…

The more you read and learn, the better off you will be when creating your investment plan (or philosophy).

Mike

Cheers,
Brad

But just because times are bad is no reason to stop thinking about your investments. A little skepticism is healthy – just don’t make rash decisions that undermind all the hard work you’ve done so far. Have an investment plan and stick to it (and this is the hard part) even when times are tough.

While I certainly agree that it makes sense to focus on what you are interested in, I would like to point out that one is more likely to learn more about herself if she spends a decent amount of time focusing on those philosophers with whom she DISagrees.

I would think that this is a good way to study personal finance as well. If you think you should allocate most of your investments in, say, bonds, I think it would be in your interest to seek out the thoughts of those who disagree with such an allocation.

Over the past couple years, I’ve made an effort to stress the psychological aspect of personal finance. I’ve often stated that I believe money is more about mind than it is about math. It goes deeper than that, though.

I believe that all of the choices we make in our life are bound together. There’s a reason I was a fat man in debt working a job that made me unhappy. I don’t know exactly what the reason was (or is), but I’ve been working to deal with the symptoms. Eliminating my debt was a start, and now I’m continuing the process by focusing on fitness. All of this is tied together, not just for me but for everyone.

The key, as Kent says, is to know yourself. If you can’t find your goals, then at least try to learn what makes you tick. When I first started turning my life around, I had to trick myself. There’s nothing wrong with that. If you can develop good habits, get started on your own path, then these good habits will lead to good thoughts (in general).

And that’s the key: finding your own path. It’s been a long time since I wrote it, but I believe it’s imperative that you do what works for you. We each have different destinations in life, and we each have our own ways of doing and thinking. What might work for me may not work for you. Don’t believe that there’s only one right way to pay off debt, for example. If you try the debt snowball and it fails, then look for another method.

Know yourself. Find your path. Succeed.