What’s the scale say?

“More people have lost money waiting for corrections and anticipating corrections than in actual corrections.”
– Peter Lynch (Mutual Fund Manager)

I’ve been training people since 1998. And not once has someone called and said, 

“Will you please train me to know the difference between a stock market crash and a stock market correction. Because I want to be able to keep my money in the market for the corrections but take it out for the crashes… and then know when to get back in…”

But isn’t this what is at essence of what people want with their investment money? Everybody knows stocks outperform bonds, its those consistent but dangerous “crash or correction” pullbacks.

Don’t you think people want to know the difference? 

I bet most people do. 

Because it’s the only difference. Or the only thing that really matters. Not economics or politics or money printing or wars or famines or anything else when it comes to investing. 

Just train my money and brain to know the difference. 

Almost nothing else matters when it comes to growing money.

Heck, the stock market goes up and to the right 78% of the time. So why hedge during that 78% of the time. It doesn’t make sense. Hedging isn’t an asset, like most of us have been taught. Hedging is a behavior or strategy. Gold didn’t hedge from 1980 to 2002. It slowed the growth of your money. 

Why drive down the highway like it’s pitch black with sleeting rain and snow when it’s clear skies, dry roads and a straight highway for as far as you can see? The problem is people have not been trained to invest facing the markets with their eyes open. 

Last week I talked about how this relationship was one of the relationships that matters to knowing the stability of the stock market. 

I’ll also started out the post with a quote from Seneca, the stoic philosopher, about how most people suffer in imagination than in reality. 

I think of all the unnecessary suffering done in regards to the markets because of hype, fear, fake-news and lies…. all to get you to click. 

And then the week before I talked about how I believe a bull market is starting for 96% of the world. As in, the rest of the world outside of the United States. 

You can see that post here. And if you live overseas this might hit you as, “…finally!” But it’s important to keep a global unattached view on what is happening in the markets because we want to think our market is the only market that matters. 

In fact the first price chart I use in the “96% of the world is starting a bull market” is a pretty powerful one. And even if you read my post two weeks ago, it would serve you well to track this index, as it’s one of the most important in the world, yet seldom referenced. 

And then three weeks ago, my post was titled, What Is The Weight Of The Evidence Showing?

I love this idea of weighing price evidence. 

I didn’t put the world “price” in the title but that is what I was weighing in this post. 

There are seven price charts in this post. Three of them are looking at interest rates in three of the four largest economies on the planet. And the other four are looking at four different locations on the planet. Hint, they are breaking up and out. 

Price moving higher is a sign of strength and not weakness. 

And by keeping the weighing of price and not economic news you get to eliminate the noise and confusion and doubt and anger… BECAUSE when you are taught how to unlearn all the crap that doesn’t matter. You live a freer life. 

Think about all the stuff you have learned. Wasn’t a lot of your learning, learning what was not right. Or true? Wasn’t it really unlearning? 

Unlearning and stopping what is unnecessary is what Occam’s Razor is about. And it’s a cornerstone of my 8-week training course. 

Occam’s Razor is how my training graduates can do much less than all of their friends when it comes to investing and why they have much lower worry and concern. They are not checked out. They are checked in, but just with the signals that matter most. And not the noise. 

When the weight of evidence changes. I want to change my mind. I have a goal weight for my body. And when I get five pounds above or below that weight I take action. If I’m above it. I immediately cut all snacking until I’m back to my target weight. And if I’m below it. I immediately start snacking on nuts, seeds and cut up fruit. 

I first have to have a functional scale. So I can actually weigh myself. The scale weighs my weight. But that’s only part of it. I also have to know at what point I have to change my behavior based on “the weight of evidence.” This is what many people get wrong because they are so committed to some narrative of money printing this or money printing that. 

They are stuck in some else’s story.

But if you are trained to weigh evidence and know what to do when it changes, then you become less attached to what you actually own. And more attached to the process. The problem of course is, people are not trained to have a great process. 

Process is king.

In Your Corner,

RCPeck-Dig Signature.JPG

RC Peck, CFP

So few words…

  1. “Today’s headlines and history’s judgement are rarely the same.’” – Condoleezza Rice
  2. Less news. More price. More weighing. More detachment.

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