Investors; It's Not The Goal, It's The Behavior

 It's Not The Goal, It's The Behavior

by: Brendan Magee

The other day I was listening to an investing commercial on the radio and the man spoke about what they would do for investors. They said if you came into their office you would have a conversation about your goals and then they would help you create a plan to help you reach your financial goals. They stressed the importance of an investor focusing on their goals. 

Goals, no doubt, have their place, but if all you do is focus on your goals, you aren't going to accomplish a thing. The focus needs to be on the behavior. Whether it's dieting and becoming physically fit or investing, the behavior is going to determine what you achieve. Simply getting on a scale for the next 30 days with a goal of losing five pounds isn't going to magically make it so. You better start eating some vegetables and stay away from the ice cream and cookies.

Investing is the same way. Simply looking at your account balance isn't going to make me a millionaire. I better start saving. I better cut down on eating out and running up the credit cards. I better take the time to understand what are the rules for successful investing and start applying them. 

I should probably determine if I am capable or incapable of following those rules on my own. If not, I should employ a coach who will make sure my behavior is consistent with reaching my goals, even when I don't want to. 

Brendan Magee is the founder and president of Inevitable Wealth Coaching. With questions or comments e-mail brendan@coachgee.com or call 610-446-4322.

March Madness Blown Calls & Investing, Some Times Once Is All It Takes

Reffing And Investing, 

Some Times Once Is All It Takes

        by: Brendan Magee

With the NCAA Basketball Tournament and the fact that with one loss you go home, everything is at a fever pitch. As it was during the Northwestern/Gonzaga game one blown call changes everything, for the players as well as the referees.

As a ref of 15 years, I can tell you that you can be reffing and everything can be going along just fine and in the blink of an eye you can blow a call. Yes, it happens and I am not saying anything you don't already know. 

However, what you don't know is what happens to the ref who blew the call. He or she has supervisors they have to answer to. They will be asked why they made the call they did, or why they didn't make the call that should have been made. Their reputations and the games they will get in the future will depend on the answers they give.Future games and the thousands of dollars in paychecks can be taken away from them. It takes a long time to get to the level of a college official and in a second all that you have worked for can be lost and never be gotten back.

It can be that way with investing. How many people do you know lost a ton of money in the tech stock crash in the early 2000's or the housing bubble of 2008? It's sad and seems quite unfair, that like the hard working ref, that all that you have been working for your whole life can be lost in a flash and never gotten back. 

As it is with reffing (even with three refs), investors have blind spots, and the biggest most devastating problems will come from what you cannot see or account for. Now, the truly scary part here is that we always have blind spots. At no point in your driving life are you driving where you can see everything. It is the same thing with investing. How come you have blind spots? The answer is because you are human. The Creator only gave us eyes in the front of our heads, not the backs. 

So as investors how is it that we have blind spots? We have eyes, ears, brains. What's the problem? We are not infallible as to how we take in information. How many times has your wife or kids told you, you don't listen? Lets give ourselves some credit and say we listen at least 50% of the time. That leaves a good percentage of the time that we are not tuned in to what people are saying to us. Sound like a recipe for an argument? This is just one example of when we aren't totally tuned in to what is happening around us.

 This is why you have a coach and what you pay them to prevent. Because, unfortunately there are somethings in life where it only takes one time to make a permanent change to your life. 

Brendan Magee is the founder and president of Inevitable Wealth Coaching. With questions or comments go e-mail brendan@coachgee.com or call 610-446-4322

Funds, That Are Driven By Research, So What?

NCAA Pools & Mutual Funds Driven By Research, So What?

                   by: Brendan Magee

With March Madness upon us once again, I find myself parked in front of the television a lot more which means I am seeing a lot more investment commercials too.

One in particular caught my eye. There was a former college basketball player serving as this mutual fund company's spokesman and he was saying that this company's big selling point was that the company's funds were,  "Driven by research!"

On the surface that sounds pretty good. Who wants to put money into a fund driven by blind pure random luck? Where's the wisdom in that? Unfortunately, that is actually what the investors in this fund are actually doing. 

See what the fund company fails to convey in this commercial is that all the research in the world will not have anything to do with how that fund performs in the future. In Free Market investing, all the knowable and predictable information that exists about the market or individual stocks has already been factored into the market and the prices of the stocks. As information changes and becomes available that new information gets absorbed into the price almost instantaneously. Think about how quickly we get news about events happening around the world these days. It is only unknowable and unpredictable information and events that will move the market or stock prices.

Another way of saying that is that it is what happens tomorrow, next week, next year, the next ten, 20,30 years that is going to determine how a mutual fund is going to perform. Do all the research you want. That information is already factored into the market. Trying to use that information to figure our how the fund will perform in the future is pure speculation and gambling. It's like using the season that just finished up and all the information that goes with it to predict who will win the NCAA Basketball Championship. Think about it, how many of those office pools have you actually won?

Gambling with a few bucks on an office pool might be fun with a few entertainment dollars, but not with the money you are going to need in retirement.

Brendan Magee is the founder and president of Inevitable Wealth Coaching.With questions or comments e-mail brendan@coachgee.com or call 610-446-4322