When it comes right down to it, being a successful investor means at least these two things:
- That you get the return, net of reasonable access fees, of the market.
- And just as important in my opinion, you get what you expected to get.
Many Happy Returns
Let me explain. The stock market is attractive and has been made the investment option of choice for nearly 100% of all retirement accounts nationwide because of what it has done in the long term. Not only have stock values risen by double digits in the long term, but there is economic data and valid reasons why this is true – namely, cost of capital. The market return is the standard return that we should have as our goal.
Drama-Free Expectations
Then, as an investor who is achieving market returns, we also want to gain these returns without being anxious and freaked out all the time. This is only possible if we are getting what we are expecting. At any time, if the results we are experiencing don’t match our expectations, we will experience some level of emotion, good or bad. So, being a successful investor not only means getting market returns, it means getting them without undue negative emotions along the way.
As an investor who is tracking your investments, I require both in my definition of success.