Fear and Greed

We all know that fear and greed are poison when it comes to being a successful investor. Greed leads to chasing hot sectors and will leave you frustrated because you will never be where you need to be before the returns come. Fear will cause you to make destructive moves and miss out on opportunities you might otherwise have realized as gains.

Some will go to the guarantee of an annuity for the answer. Others will pay expensive, active mutual-fund managers or brokers to buy and sell and make predictions for them. Still others will keep their invested dollars on the sidelines because they can’t handle the ups and downs. All of these traditional answers—responses to fear and greed—will ultimately cost the investor tens, if not hundreds, of thousands of dollars over a lifetime.

We know that the market has produced amazing returns for those who have the discipline to ignore fear and turn away from greed and allow their invested assets to grow. So what is the answer? How do we keep fear and greed from stealing our wealth?

The only real answer to fear and greed are their positive opposites—Faith and Contentment.

So often we try the “stop” method for the things we want to change. We want to loss weight, so we try to stop eating. We watch too much TV so we stop watching TV. But unless you put something positive in its place, that thing will just creep back in.

It’s the same way with fear and greed. If instead of being afraid we cultivate faith, then we are slowly removing fear by putting something more powerful in its place. If we have greed, the solution is to replace it with something more powerful—contentment.

I sometimes struggle with fear and greed, but these internal emotions never win the day. My faith and contentment are firmly in place and are much stronger than fear or greed could ever be. This begs the questions though – Faith in what? And, how does one achieve contentment?

Check back here on a future Monday for the answers.

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