The Outlook of a Successful Investor

Back in high school I was in the JROTC Ranger team.  The stated goals of the team were to teach leadership and team building, but I’m convinced that the main purpose was to allow masochists to see how much they could endure.

Try-outs for the team started with a field day at the high school.  One needed to be able to do 40 push-ups and 40 sit-ups in a minute, do 8 pull-ups, and then complete a three-mile run around the school in something like 30 minutes.  If you were able to pass those tests, you then went on the “Ranger Walk.”  This walk started at 10 PM in a parking lot near my home.  We walked all night long along a canal, a total of something like 15 miles.  At about 6 AM in the morning, after about 30 minutes of rest, you completed the walk by climbing up to the top of a 1500 foot mountain (the trail was about 1.5 miles each way).

If you got that far, you would go on a long hike a few weekends later.  Either to the top of a 11,000 foot mountain in Eastern Arizona (this was a 15 mile walk if you started from the trailhead, but we started from the camp to add another 6 miles), or through the Grand Canyon.  The Grand Canyon hike involved going down South Kiabab trail at about 6 AM, going down to the river, and then climbing back up the Bright Angel trail, arriving at the rim at about 8 PM at night.  It was freezing at the top, really hot at the bottom, and then freezing again on your way out.  This was a total of about 25 miles and is not advised in the literature for the Grand Canyon to be done in one day.

If you were able to complete all of these requirements, you were on the team and allowed to go on several camping trips during the year where you set up your tent in the dark, got up at the crack of dawn to exercise and go for a long run, and then spend the entire day hiking around through the woods and doing other physical activities.  There was a bit of rappelling and pellet gun shooting mixed in, but there was always a lot of walking.

Looking back on this, it sounds pretty miserable.  Really though these were some of the best memories of my life.  Not because of the blisters or the activities, but just the sense of accomplishment and the attitude it promoted.  You see, when you were in the middle of a 20 mile hike (with jogging interspersed just for fun), if someone asked you how you were doing the answer was always, “just great!”  No matter how much your body hurt (and I remember barely being able to walk after coming home from one of these weekends),  you always kept a good attitude and took pride in keeping a good attitude.

The psychology of a successful investor is very much the same.  You must be objective in your evaluation when selecting companies to invest in, but you must keep a positive attitude once you are invested.  You need to avoid letting fear creep in, causing you to second guess yourself and sell at the wrong times.  You must be willing to stick with your companies through the bad times, buying more as prices get cheaper and no one else wants to be in the market.

The biggest gains aren’t made at the end of a long run when everyone is an investor.  They are made right after a crash when no one wants to touch stocks.  The best times to invest in the last 20 years were after the dot com bust in the early 2000’s and after the housing bust in 2008.  If you had allowed fear to take over and jumped out of the market, you would have locked in losses and seen the market recover without you.

So when investing, ignore the bad days, or save up cash for when the bad days come, because it is then that the market is on sale.

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Disclaimer: This blog is not meant to give financial planning or tax advice.  It gives general information on investment strategy, picking stocks, and generally managing money to build wealth. It is not a solicitation to buy or sell stocks or any security. Financial planning advice should be sought from a certified financial planner, which the author is not. Tax advice should be sought from a CPA.  All investments involve risk and the reader as urged to consider risks carefully and seek the advice of experts if needed before investing.


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