Most Popular
1. THE INFLATION MONSTER is Forecasting RECESSION - Nadeem_Walayat
2.Why APPLE Could CRASH the Stock Market! - Nadeem_Walayat
3.The Stocks Stealth BEAR Market - Nadeem_Walayat
4.Inflation, Commodities and Interest Rates : Paradigm Shifts in Macrotrends - Rambus_Chartology
5.Stock Market in the Eye of the Storm, Visualising AI Tech Stocks Buying Levels - Nadeem_Walayat
6.AI Tech Stocks Earnings BloodBath Buying Opportunity - Nadeem_Walayat
7.PPT HALTS STOCK MARKET CRASH ahead of Fed May Interest Rate Hike Meeting - Nadeem_Walayat
8.50 Small Cap Growth Stocks Analysis to CAPITALISE on the Stock Market Inflation -Nadeem_Walayat
9.WE HAVE NO CHOICE BUT TO INVEST IN STOCKS AND HOUSING MARKET - Nadeem_Walayat
10.Apple and Microsoft Nuts Are About to CRACK and Send Stock Market Sharply Lower - Nadeem_Walayat
Last 7 days
Elliott Waves: Your "Rhyme & Reason" to Mainstream Stock Market Opinions - 6th Aug 22
COST OF LIVING CRISIS NIGHTMARE - Expect High INFLATION for whole of this DECADE! - 6th Aug 22
WHY PEAK INFLATION RED HERRING - 5th Aug 22
Recession Is Good for Gold, but a Crisis Would Be Even Better - 5th Aug 22
Stock Market Rallying On Slowly Thinning Air - 5th Aug 22
SILVER’S BAD BREAK - 5th Aug 22
Stock Market Trend Pattren 2022 Forecast Current State - 4th Aug 22
Should We Be Prepared For An Aggressive U.S. Fed In The Future? - 4th Aug 22
Will the S&P 500 Stock Market Index Go the Way of Meme Stocks? - 4th Aug 22
Stock Market Another Upswing Attempt - 4th Aug 22
What is our Real Economic and Financial Prognosis? - 4th Aug 22
The REAL Stocks Bear Market of 2022 - 3rd Aug 22
The ‘Wishful Thinking’ Fed Is Anything But ‘Neutral’ - 3rd Aug 22
Don’t Be Misled by Gold’s Recent Upswing - 3rd Aug 22
Aluminum, Copper, Zinc: The 3 Horsemen of the Upcoming "Econocalypse" - 31st July 22
Gold Stocks’ Rally Autumn 2022 - 31st July 22
US Fed Is Battling Excess Global Capital – Which Is Creating Inflation - 31st July 22
What it's like at a Stocks Bear Market Bottom - 29th July 22
How to lock in a Guaranteed 9.6% return from Uncle Sam With I Bonds - 29th July 22
All You Need to Know About the Increase in Building Insurance Premiums for Flats - 29th July 22
The Challenges on the Horizon for UK Landlords - 29th July 22
The Psychology of Investing in a Stocks Bear Market - 26th July 22
Claiming and Calculating The Research and Development Tax Credit - 26th July 22
Stock Market Bearish Test - 26th July 22
Social Media Tips and Writing an Effective Call to Action - 26th July 22
Has Rishi Sunak Succeeded in Buying His Way Into No 10 - Fake Tory Leadership Contest - 26th July 22
The Psychology of Investing in a Stocks Bear Market - 26th July 22
Claiming and Calculating The Research and Development Tax Credit - 26th July 22
Stock Market Bearish Test - 26th July 22
Social Media Tips and Writing an Effective Call to Action - 26th July 22
Has Rishi Sunak Succeeded in Buying His Way Into No 10 - Fake Tory Leadership Contest - 26th July 22

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

This simple Stock Market mindset shift could help you make millions

Stock-Markets / Stock Market 2021 Dec 03, 2021 - 01:13 PM GMT

By: Stephen_McBride

Stock-Markets Editor’s note: Today, we’re sharing an important adaptation from Chief Analyst Stephen McBride’s recent issue of Disruption Investor

One that’s more important than any one specific stock recommendation…

This is about a simple mindset shift that can make or break your retirement, so you’ll want to read closely.

***

“Most American investors now expect the stock market to crash.”

That Business Insider headline flashed across my screen recently.

Over half of American investors think stocks are headed for a crash, according to a survey by insurance giant Allianz.

New data from The American Association of Individual Investors paints a similarly gloomy picture. The number of stock market bulls is near its lowest level in a decade.

Judging by how investors feel, you’d think the market is struggling…

But did you know the S&P 500 hit new record highs last week?



US stocks are up around 23% since January. They’re now on track for their fourth-best year since 1999.

Why are folks so pessimistic when things have never been so good?

I’ll let you in on a dirty little secret of investing: we’re hardwired to be pessimistic.

The skeptic who talks about what could go wrong sounds intelligent. He sounds smarter than the oblivious optimist. That’s why you see so many gloomy Wall Street analysts on CNBC.

Overcoming our negative bias is one of the biggest challenges we face as investors. If you can conquer this bias, you’ll unlock huge opportunities in the stock market.

Let me show you how this simple mindset shift could help you make millions of dollars in extra profits over your lifetime.
  • The first person I heard talk about the stock market was one of my college professors.

I owe that guy a lot.

Maybe I wouldn’t have started investing without him. I used to think investing was an activity reserved for rich London stockbrokers.

Problem was… my mentor was a total pessimist. You know the type… always convinced the next stock market crash was right around the corner.

He owned a few stocks. But the majority of his money was in gold and silver. One day, he even brought in a 100oz silver bar in a plastic bag to show me. His arguments for buying hard assets sounded convincing.

Governments printed trillions of dollars after the financial crisis. This “funny money” pumped up stocks, which could collapse any day. To protect yourself, you had to own assets that couldn’t be created out of thin air.

I fell hook, line, and sinker for this argument and threw all my money into “smart” investments like gold and silver. It felt like I was in on some secret only intelligent investors knew about. Buy stocks? That was for suckers who were going to lose all their money.

But the joke was on me. US stocks went on to have one of their best decades ever... while precious metals were one of the worst-performing assets over the same timeframe.

Luckily, I figured this out early: betting on the end of the world is a surefire way to go broke. I started investing the vast majority of my net worth in the stock market.

I learned to stop obsessing about what might go wrong and instead look at the facts. And the facts show markets reward optimistic investors.

Take a look at this chart of the S&P 500’s all-time performance.



Let me repeat: the odds of making money in US stocks is 100% over any 20-year period in history.

Unfortunately, many folks are still trapped in a pessimistic mindset today. It’s why most US investors expect stocks to crash, even when markets are surging to new highs.

  • Why are we hardwired to be pessimistic?

It dates back to hunter-gatherer times. In those days, focusing on what might go wrong was a matter of life and death. For example, if you didn’t store enough food, you starved to death. If you didn’t guard your camp, a bear might eat you.

You must train yourself to tame this instinct in order to achieve investing success.

As legendary Fidelity money manager Peter Lynch once said, “More money has been lost by investors preparing for corrections, or trying to anticipate corrections, than has been lost in corrections themselves.”

In short, buying the best stocks in history required you to have a bullish mindset.

Imagine telling someone Netflix (NFLX) would disrupt the powerful cable industry 15 years ago? They would have called you crazy.

Yet today, Netflix has more subscribers than all the cable networks combined. And the stock has rocketed 4,000% over the past 10 years.

Same for Amazon (AMZN). In 1999, former 60 Minutes host Bob Simon laughed out loud at the thought of “a couple of geeks who sketched out some software” destroying Sears Roebuck.

We know how that story played out. Amazon handed early investors 100,000% profits.

Don’t get me wrong, I’m not saying optimists always make money. Or that they always get in early on the next big thing. But being willing to take chances on potentially world-changing businesses is a virtue. You can make life-changing money by getting in early on just one incredible disruptor stock.

Pessimists have no chance of catching the best-performing stocks. They’ll come up with 10 reasons why it won’t work. They’ll talk themselves out of buying it.

But remember: the story of the US stock market over the past century isn’t one about pessimists. It’s about optimists and new record high after new record high.

The Great Disruptors: 3 Breakthrough Stocks Set to Double Your Money"

Get my latest report where I reveal my three favorite stocks that will hand you 100% gains as they disrupt whole industries. Get your free copy here.

By Stephen McBride

http://www.riskhedge.com

© 2021 Copyright Stephen McBride - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in