Watch any movie or TV show about investing in the stock market and you will be totally captivated by all of the excitement.
People on the trading floor shouting and running around. The guy from Billions making some back door deal to screw someone over and make himself a ton of money. The excess of The Wolf of Wall Street.
It’s also this same excitement that can lead to the intimidation of the stock market. We think that all of these real-life “characters” are some experts manipulating some impossible system that we could never understand.
But then, hopefully through this blog or some other medium, you’ve come to realize that this is all a mirage. These “active” stock market investors underperform the market 80% of the time. And there is no way to predict who will be part of the 20% to outperform the market beforehand. And just because someone outperformed the market before does not mean that they will do it again.
Regression to the mean is the rule.
This is when another type of investing excitement pops up
If you are anything like me, you get super excited when you learn all about how passive investing in low cost, broadly diversified index funds will make you better than 80% of Wall Street.
You dig deeper and learn about asset allocation, rebalancing, and you figure out how to manage your own finances.
Then you actually come up with a whole written financial plan.
And you put that plan into action!
That is what I did
I took time and dedicated myself to financial education. I read a number of books like these, listened to podcasts like these, and read one financial blog post a day.
This started probably around February/March 2020. So, by May 2020, my wife and I had out financial plan in place and were ready to start putting it into action.
One of the first things that I did was to put $1750 into a Roth IRA. This was about all that we could spare for this while still training in NYC with 2 kids and meager income.
Honestly, we should have just used this money to pay off loans. That would have actually been following our financial plan. That’s also what Selenid reminded me that we should do.
But, I was excited
I had just learned how to actually invest wisely and stress free in the stock market. I wanted to start right away! And I knew that this was the last time in my life that I would be able to contribute directly into a Roth IRA.
(Note that you can contribute to a Roth IRA for the prior tax year up until that year’s tax deadline. This is usually April 15, but was pushed back to July for the 2019 tax year by the CARES Act. That’s how I could still contribute in May for the 2019 tax year.)
And so I opened a Roth IRA with Vanguard, plopped the money into some index funds, and felt really accomplished. Which I think is legit! As you progress in your financial education, remember to pat yourselves on the back for your accomplishments!
And at this point, my stock market investing excitement reached a high!
I would check the S&P 500 trend every day (ok fine, multiple times a day) on my iPhone app.
I would check my account pretty much every day and look at how things changed.
Not by any planning, I had investing on the upswing after the CoronaBear market. So most days, my account balance was going up. Granted it wasn’t by much, I had <$2,000 invested.
But still, this was a very cool experience living out the principles that I had been learning and teaching myself.
Then it began to fade
I can’t tell you exactly when it began to happen. But it did happen.
Maybe I checked my iPhone Stocks app every week or so. Maybe I checked my Vanguard account once in awhile.
Eventually I just stopped altogether.
And that’s why I’m writing this post. Because randomly the other day, I happened to swipe on my phone and see what the S&P 500 had done for that day. And I realized that I hadn’t done that in forever. I also realized that I didn’t care one bit about what the market had done that day.
And that’s when I reallllly loved stock market investing
That’s the beauty of it all, right?!
When you invest in the stock market the right way, you are doing so passively. You are approximating the market, which in the long term is a very safe bet. You absolutely, 100% do not care about short term volatility. We are in this for the long haul baby!
That all means that you don’t need to pay attention on a daily, weekly, or even monthly basis if you don’t want. You just really need to rebalance back to your chosen asset allocation once a year. That’s it. And you will be better than 80% of all investors, including Wall Street.
The excitement surrounding your stock market investing has now become boredom
And that’s really the goal.
You are investing to secure your future. Not to chase excitement. So invest in a way that secures your future in the best, most efficient manner and requires minimal of your effort.
Then you can spend your time following your passions and the stuff that you really get excited about!
Just don’t let this boredom lead you to the dark side…
That’s right. This boredom is a total blessing when viewed with the right perspective and mindset. But it can absolutely be a curse with the wrong outlook.
I know people, some in my own family, who totally understand and agree with the superior success of index fund investing. But still, they are chasing that initial excitement that they felt when they started investing.
So, they turn to the dark side…individual stock picking, day trading, and timing the market with things like options and puts, etc.
Please don’t do this.
This is gambling. That is the type of excitement that you are chasing. It is exactly the same. Reel yourself in and remember why you started investing in the first place. It wasn’t for excitement.
Ideally, your written financial plan will keep you on the right path, once again highlighting why it is so important to have one!
Ready to learn more about the right way to invest in the stock market?!
- Stress Free Stock Market Investing Is Easier Than It Seems!
- My Stock Portfolio Is Better Than Your Financial Advisor’s
- The 7 Step Basic Formula for Wealth as a Physician
- Asset Allocation and Rebalancing: A How-To Guide for Buying Low, Selling High, and Relaxing In Between
- A Quick and Dirty Guide to All Types of Investment Accounts: Where Should You Put Your Money?
What do you think? Are you bored with your stock investments? Have you been tempted to add some excitement back? What’s your philosophy? Let me know in the comments below!
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