Doom and Gloom Investing

The simple pleasures in life, like quietly reading a book, often bring the most joy. I enjoy reading about history and the economy, so I recently searched online for some of the most popular titles on investment advice.

What I found was disturbing. Nearly every popular title on finance and the markets was built on doom and gloom. I suppose that’s nothing new, but the Internet has made it that much easier to be connected to these doomsday forecasts via online books, newsletters, blogs, and videos.

As I continued looking at these titles, I realized that a formula was at work. I am now going to reveal to you how to write the next big business bestseller. It’s actually not that difficult. You just need a catchy title; the content doesn’t much matter. 


Steps to Writing a Successful Business Book

Step 1:  You must refer to a recent problem by using one of the following words: “crash,” “crisis,” “aftershock,” “collapse,” “bubble,” or “meltdown.”

Step 2:  You must predict another crisis. Use words like “coming,” “next,” or “future.” For extra air, write that the problem will be “global.”

Step 3:  Your book title must imply that you have a “survival guide” or “strategy” that will result in a “profit.”

What Do These Books Do?


Most of those books do the same thing. They paint a horrible picture of the future, backed up by evidence of the recent horrible past, and then they reveal some magic formula for profiting from the next crisis. These books are usually written by people who want to sell you a newsletter or manage your money.

What you often get are fancy words with a false premise. Most often, the core of the investment philosophy is a belief in timing the markets. The authors will claim to keep you out of stocks when things look risky and get you back into stocks (or whatever asset class is the flavor of the day) when the time is right. They probably believe they are correct—but they are delusional if they think they have the holy grail of investing. Nobody has found that, and nobody ever will.

Here is the truth you need to know: the philosophy of buy and hold is not dead. What has worked is what will work. You need a proper allocation of stocks, bonds, and cash. You always need to own the stocks of well-run companies; that’s where the growth has been. You should set aside five years’ worth of income in stable investments and then invest the remainder in growth-focused investments. When you have gains in the latter, use them to replenish the former. Lather, rinse, repeat.

Tying It Together

 

We don’t have many clients who buy into the doom and gloom perspective. They know better, and that’s why they sought us out. The doomsayers tend to attract their own kind. I am an optimist at heart. I believe in the human spirit’s ability to do far more than survive. We are meant to thrive. I believe that those who build upon that premise will be well on their way to achieving their dreams.

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