A Straightforward Approach to Investing

Pardon my language, but moving sucks.

We recently relocated from Florida back to Texas. My native Texan wife is ecstatic. And I’ve got to admit, the weather has been awesome for the past two months.

But almost nothing about the move was enjoyable, including the process of settling into our new home.

It’s not that we don’t like it. The house is fabulous. But there are things she – I mean, we – think need to be updated or remodeled.

That’s where the fight starts.

Not between the two of us, but between me and inertia. And I don’t always win.

It’s not like standing in front of the paint color wall at Home Depot. This is no metaphor; we actually stand there. As we do, I can feel each second of my life ticking away.

Are there really 97 shades of white? No, I don’t care which one.

I don’t care for paint. I don’t want to paint anymore. Please release me from this retail inferno!

Usually – or always – my wife will roll her eyes at my indecision and make a choice. Then we get the joy of stripping wall paper, prepping walls, taping and masking, and painting.

It’s a lot of work, and often I put off starting because I know how much it will take. But I’m always happy we did it, because the end result gives us what we want.

I think of investing the same way.

There are too many choices.

It’s hard to get started.

And once you’ve begun the process, stopping halfway can be disastrous, and it’s difficult to manage the details.

However, if you do it right, you’ll be happy with the results and sleep better at night.

But you’ve got to overcome the hurdles by using a process that you can live with – and use to sift through or cut out the choices, not to mention the noise in places like the financial media, or elsewhere.

I recently read that Amazon offers more than 1,100 toilet bowl brushes… and many of them have reviews. I don’t know if I’m more concerned with the number of choices or the fact that people take the time to review such a thing.

Either way, buyers have to make decisions. If you mess it up, you throw away a $5 piece of plastic and wire and start over.

With investing, if you do it wrong you have to make up for lost ground, which could take years, if it ever happens. Don’t become paralyzed by too many choices. It’s called paralysis by analysis.

Instead, find a body of research or investment selection process that allows you to narrow the choices from thousands of potential holdings to a manageable universe.

And don’t get married. At least not to an investment.

I often repeat the mantra that “I’m not married to anything but my wife.” If it’s time for an investment to leave your portfolio, let it go. Don’t worry about what could’ve been, or how high it might go after you sell it.

Focus on the security selection process that you have in place.

Investors often lose sight of the goal of investing. It’s not to bring about world peace or save the Delta smelt.

There are ways to work toward those goals, but investing is about earning superior returns and growing one’s wealth. If you like a cause but the stock should be sold, then sell the position and use some of your profits to buy a bumper sticker.

Finally, pay attention to the details… all of the details.

When your investment approach calls for buying, then buy. When it signals a sell, sell.

Too often we get lazy in our investments. Sometimes, when things haven’t gone our way, instead of reviewing the investment selection process to verify that we’re using the right one, we simply stop following the strategy.

That leaves us with the worst of both worlds – a strategy we don’t trust and no defined goals for what we own. Sometimes we lose focus simply because nothing has happened in recent weeks. Our attention drifts. We get distracted by life, or the news of the day.

Whatever the reason, if you’ve strayed from your investment strategy, or find it too overwhelming to follow, now is the time to redouble your efforts and get back on track. The exact moment you find yourself off course is the time to take corrective action.

At Dent Research, we’ve been working for years to address these issues, and recently we’ve developed an elegant solution in the form of a brand-new service.

It’s called the Dent Cornerstone Portfolio.

Pulling from all of our economic and investment research, and spanning all of our investment solutions, I’ve built a portfolio of fewer than 20 positions for subscribers.

Our recommendations will be straightforward, with clear percentages and actions to take, eliminating the problems highlighted above. It streamlines all of the best Dent Research has to offer.

But no matter what investment strategy you choose, do yourself a favor. Follow through.

Your portfolio will thank you, your family will thank you, and it will give you more time for home renovation. Then you can join me in the paint aisle at Home Depot.

Rodney Johnson
Follow me on Twitter @RJHSDent

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Categories: Investing

About Author

Rodney Johnson works closely with Harry Dent to study how people spend their money as they go through predictable stages of life, how that spending drives our economy and how you can use this information to invest successfully in any market. Rodney began his career in financial services on Wall Street in the 1980s with Thomson McKinnon and then Prudential Securities. He started working on projects with Harry in the mid-1990s. He’s a regular guest on several radio programs such as America’s Wealth Management, Savvy Investor Radio, and has been featured on CNBC, Fox News and Fox Business’s “America’s Nightly Scorecard, where he discusses economic trends ranging from the price of oil to the direction of the U.S. economy. He holds degrees from Georgetown University and Southern Methodist University.