Updated: Aug 26, 2020
Brandon Adams Episode Takeaways
3 Mistakes Investors Make:
Error in Expectation: Investing in something that objectively has low to negative returns. Make sure you do your research on the stock and have a clear opinion on the company and market.
Error in Variance: Under-diversification is a common mistake for beginner investors. Make sure you reduce variance in your portfolio by investing in a wide variety of assets so you are not crushed by unforeseen market events.
Error in execution - This usually occurs when people overtrade. A small investor losses a lot of money by paying large bid-ask spreads and slow execution times. This is why casual day trading is usually not the best idea if you don't have the proper resources.
Operate in small markets. As a private investor in the stock market, you can take advantage of niche plays that a large investor is not able to. Investing in micro-cap value stocks for example is a way to find inefficiencies in the market. When it comes to blue-chip stocks inefficiencies are hard to find and large players use their size to take over.
Stay up to date with the stock market and the economy. It’s important to understand our current market conditions and how our real economy is related to the stock market. Understand what fiscal and monetary policies are being implemented because they affect how you might plan to invest in the future. Currently, our financial markets are being bolstered by an influx of liquidity from the Federal Reserve while our real economy is struggling.
Invest in Market Index ETFs, if you don’t have enough time to do full research or take advantage of small market inefficiencies than investing in index ETFs is a great way to invest in a diversified portfolio of stocks. Although this isn’t a riskless option, if you are interested in investing in the market, this is an easy way to do so.
What we Learned this Week:
Write a schedule for short term goals, give yourself short deadlines to finish courses, books, or assignments you are working on. This will improve your self-discipline and if you don’t finish in time it’s not the end of the world!
Do extra self-education past the demands of your work. Take the extra time to read and study what you are truly passionate about. This extra knowledge will translate into your work, whether it is related or not.
Always stay current and looking for opportunities. We have started reading more articles in order to truly understand our current business environment, especially with the constant changes we have seen with Covid-19. When you do this you can be ready to jump on any opportunity or inefficiency that stands out to you. These windows of opportunity are usually very small so it’s important to be prepared.
Try it this Week:
Sign up for a financial newsletter. Our favorite morning newsletter is called “The Morning Brew”. It is released at 5 am every morning and gives you a very simple and funny 2 min read to keep you updated every day. A lot of their stories are derived from the Wall Street Journal and other news sources, but they write in a short and easy style of writing. Click the link here to sign up!
Follow respected people in your field on Twitter. If you follow the right pages, Twitter can be a great source to stay updated on all the newest research/data in your field.
Have you tried “SUPERCOFFEE” yet? Try enhancing your coffee this week and we promise you will have a more productive and stress-free week! Link to our recipe below.
What we're Reading
“The Sportsman” by Dhani Jones
DHANI JONES is defensive captain for the Cincinnati Bengals and the host of his own show, Dhani Tackles the Globe, on the Travel Channel. In his book he talks about the uncertainity he felt after his Football Career and how he struggled to find his passion. He decided to travel the world doing what he loved, which was trying new sports and activities all across different cultures. His journey is filled with passion and is the same idea we are trying to accomplish with The Visionary Entrepreneur.
Quote of the Week
"If you have a truly unique skill set, you will
be successful in any market conditions."
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