Category Archives: Daily Top Ten

TOPLEY’S TOP 10 Mar 13, 2024

1. Comparison Mag 7 to Previous Concentrated Markets

Morningstar John Rekenthaler


2. Post 1999 Bubble Returns of Leadership Names

https://www.morningstar.com/stocks/magnificent-seven-fortune-or-folly


3. Small Traders NOT Driving Bitcoin Rally


4. Bitcoin Driven by Huge Flows

Found at Dollar and Cents Blog
Joe Weisenthal summarized the atmosphere of the current crypto environment beautifully in the Bloomberg Markets newsletter last week:
All that being said, there is something about this upturn that’s a little bit different than in the past. Typically there’s some sort of story or pretense that rides alongside the price. In 2021 there was a lot of talk about “DeFi” and how the various chains had the opportunity to disintermediate finance in some novel way.
Other things in past cycles you heard about where how gaming would all go on chain, with people being able to own their own characters or their character skins or whatnot. Tokens were going to replace frequent flyer miles. Ethereum was going to be the new World Computer. Real-world assets would all be tokenized, creating smoother more liquid markets for various things that are currently hard to trade. None of this has panned out so far. At all.
But not only has none of this panned out, there’s not some new “fundamental” story that’s being told about this rally. There’s not some new crypto use case that people are excited about that wasn’t being talked about 3 years ago.
The only thing people are talking about really is flows. There’s the new inflows from the ETFs.
 
https://ofdollarsanddata.com/more-people-buy-number-go-up/


5. Debt vs. Assets in America


6. May Rate Cut Probability 52% Down to 16%


7. Institutional Real Estate Allocation Changes 2017-2023

Advisors Perspectives

https://www.advisorperspectives.com/commentaries/2024/03/13/challenges-opportunities-within-commercial-real-estate


8. U.S. LNG Exports Keep Rising Despite Natural Gas Prices

Global X


9. The Countries Shutting Down the Internet

From Zerohedge Blog

https://www.zerohedge.com/geopolitical/countries-shutting-down-internet-most


10. How to Build a High-Performance Leadership Team

From INC.com

As a leader, you set the tone for your leadership team.

EXPERT OPINION BY DAVID FINKEL, CO-AUTHOR OF ‘SCALE: SEVEN PROVEN PRINCIPLES TO GROW YOUR BUSINESS AND GET YOUR LIFE BACK’ @DAVIDFINKEL
In today’s rapidly changing business landscape, the success of an organization depends heavily on the strength of its leadership team. A high-performance leadership team can drive innovation, foster a positive workplace culture, and guide the company toward its strategic goals. However, building such a team is not without its challenges. Here are some essential tips for creating and nurturing a high-performance leadership team.
1. Define Clear Roles and Responsibilities
One of the fundamental building blocks of a high-performance leadership team is clarity regarding each member’s roles and responsibilities. Ambiguity and overlapping duties can lead to confusion and inefficiency. Start by defining specific roles and expectations for each team member. Make sure everyone understands their unique contributions and how they fit into the larger team structure.
2. Cultivate Diversity
Diversity within your leadership team can be a powerful asset. A group of individuals with different backgrounds, perspectives, and skill sets can bring a broader range of ideas and approaches to problem-solving. Encourage diversity in terms of gender, ethnicity, age, and professional experiences. Embrace the value that diverse viewpoints can bring to your team’s decision-making process.
3. Nurture Effective Communication
Open and transparent communication is the lifeblood of any successful leadership team. Foster an environment where team members feel comfortable sharing their thoughts, concerns, and feedback. Encourage active listening and respectful dialogue during meetings. Effective communication enables leaders to align their efforts, make informed decisions, and resolve conflicts constructively.
4. Lead by Example
As a leader, you set the tone for your leadership team. Demonstrate the qualities and behaviors you expect from your team members. Lead with integrity, accountability, and a strong work ethic. Your actions will influence the team’s culture and inspire them to strive for excellence.
5. Foster Trust and Collaboration
Trust is a cornerstone of high-performance teams. Create an atmosphere of trust by honoring commitments, being consistent in your actions, and valuing each team member’s contributions. Encourage collaboration by facilitating teamwork, joint problem-solving, and cross-functional initiatives. When team members trust one another, they are more likely to collaborate effectively.
6. Invest in Professional Development
High-performing leadership teams are committed to continuous growth and learning. Invest in the professional development of your team members by providing access to training, workshops, and leadership programs. Equip them with the skills and knowledge needed to stay ahead in an ever-evolving business landscape.
7. Set Ambitious Goals
Challenge your leadership team by setting ambitious yet achievable goals. Well-defined objectives provide a clear sense of purpose and direction. Encourage your team to embrace these goals and work collectively to attain them. Celebrate achievements along the way to maintain motivation and momentum.
8. Emphasize Accountability
Accountability is vital for the success of any high-performance team. Ensure that team members take ownership of their responsibilities and deliver results as promised. Establish a system of accountability that holds individuals and the team as a whole responsible for meeting performance expectations.
9. Promote a Growth Mindset
Encourage a growth mindset within your leadership team. Emphasize the importance of learning from failures and viewing challenges as opportunities for growth. A growth mindset fosters resilience and innovation, enabling your team to adapt to changing circumstances effectively.
10. Regularly Evaluate and Adjust
Building a high-performance leadership team is an ongoing process. Regularly assess the team’s performance, strengths, and areas for improvement. Adjust your strategies and goals as needed to ensure that your team remains adaptable and responsive to the organization’s evolving needs.
A high-performance leadership team is the backbone of a successful organization. By following these tips and investing in the development of your team, you can create a cohesive and effective group of leaders. Remember that building and nurturing a high-performance team is a continuous journey that requires dedication, communication, and a commitment to excellence. With the right approach, your leadership team can help your organization thrive in today’s competitive business environment.
Now accepting applications for Inc.’s Best Workplace awards. Apply by February 16 for your chance to be featured!
The opinions expressed here by Inc.com columnists are their own, not those of Inc.com.
How to Build a High-Performance Leadership Team | Inc.com

TOPLEY’S TOP 10 – March 12 2024

1. S&P Ex-Top 10 Largest Stocks Trades at 19x P/E

Marketwatch https://www.marketwatch.com/story/heres-what-100-years-of-history-shows-about-periods-of-extreme-market-concentration-according-to-goldman-sachs-340ca243?mod=home-page


2. Jeff DeGraff Similar Thoughts as Yesterday’s Ned Davis Chart


3. Follow Up to Gold (GLD) New Highs…Gold Performance History by Decade


4. Classic 60/40 Portfolio Valuation at 40-Year Median Valuation Levels

From Callum Thomas


5. ETFs that Use Options are Becoming Popular

The Daily Shot Brief Equities: ETFs that use options strategies have become very popular.

Source: @financialtimes


6. The Best Selling Investment Vehicle of 40 Years is Money Market Fund


7. Venture Funding Down -50-60%

Pitchbook-Debt funding to early-stage startups, referring to companies at the Series A and B stages, plunged almost 57% to about $4 billion in 2023, while funding to seed and pre-seed startups shrank about 59% to just $610,000, according to PitchBook-NVCA.

https://www.wsj.com/articles/the-banking-crisis-a-year-ago-upended-the-venture-debt-market-founders-are-still-adjusting-54bec119?mod=itp_wsj&ru=yahoo


8. Cybercrime Triples in 3 Years

https://www.chartr.co/


9. Boomers Are Expected To Pass $90 Trillion In Assets Onto Millennials — Leaving Them To Become The ‘Richest Generation In History’

Jeannine Mancini-Yahoo Finance

In an unprecedented financial shift, millennials are on the cusp of becoming the richest generation in history, with $90 trillion expected to be passed down to them over the next two decades. This transfer of wealth, highlighted in Knight Frank’s 2024 Wealth Report, promises to reshape the economic landscape and alter the current power dynamics heavily influenced by the baby boomer generation.
The report, drawing on recent findings, forecasts a seismic change in the distribution of wealth, with millennials positioned to inherit assets that will significantly elevate their financial standing. This generational wealth transfer is not merely a redistribution of existing wealth but signals a broader transformation in the avenues for wealth creation.
As highlighted by Mike Pickett, a director at Cazenove Capital, the diversity of opportunities for generating wealth has expanded, encompassing everything from digital platforms to entrepreneurial ventures, marking a shift towards first-generation wealth creation.
Don’t Miss:

Despite this optimistic outlook, the journey to financial prosperity has been fraught with challenges for millennials. Many have grappled with an increasingly unattainable housing market, a competitive job landscape reshaped by the global pandemic and the burden of student debt. Additionally, the anticipation of inheritance reveals a gap in expectations, with a significant portion of millennials expecting a larger inheritance than their boomer parents plan to leave.
The focus on housing remains a critical concern for millennials struggling to secure a foothold in the property market. This challenge extends to ultra-high-net-worth individuals within the generation, underscoring the importance of real estate as a key area of investment. The report indicates a keen interest among affluent millennials, both male and female, in expanding their property portfolios in the coming year, mirroring a similar sentiment among wealthy Gen Zers.
The Knight Frank report also sheds light on the increasing number of ultra-high-net-worth individuals globally, projecting a significant rise in their numbers, particularly in India and mainland China. This growth underscores the expanding landscape of wealth and the critical role of the financial sector in catering to the needs of an increasingly affluent millennial cohort.
As millennials stand on the brink of a historic wealth influx, the report calls on the financial sector to adapt its services to meet the unique needs and preferences of this generation. This adaptation is crucial for managing the wealth accumulated during the pandemic and for supporting the diverse and innovative paths millennials are taking toward financial independence and wealth creation.

Boomers Are Expected To Pass $90 Trillion In Assets Onto Millennials — Leaving Them To Become The ‘Richest Generation In History’ (yahoo.com)


10. U.S. Spy Agencies Know Your Secrets

WSJ By Byron Tau

Last November, Michael Morell, a former deputy director of the Central Intelligence Agency, hinted at a big change in how the agency now operates. “The information that is available commercially would kind of knock your socks off,” Morell said in an appearance on the NatSecTech podcast. “If we collected it using traditional intelligence methods, it would be top secret-sensitive. And you wouldn’t put it in a database, you’d keep it in a safe.”

In recent years, U.S. intelligence agencies, the military and even local police departments have gained access to enormous amounts of data through shadowy arrangements with brokers and aggregators. Everything from basic biographical information to consumer preferences to precise hour-by-hour movements can be obtained by government agencies without a warrant.

Most of this data is first collected by commercial entities as part of doing business. Companies acquire consumer names and addresses to ship goods and sell services. They acquire consumer preference data from loyalty programs, purchase history or online search queries. They get geolocation data when they build mobile apps or install roadside safety systems in cars.

But once consumers agree to share information with a corporation, they have no way to monitor what happens to it after it is collected. Many corporations have relationships with data brokers and sell or trade information about their customers. And governments have come to realize that such corporate data not only offers a rich trove of valuable information but is available for sale in bulk.

https://www.wsj.com/politics/national-security/u-s-spy-agencies-know-our-secrets-they-bought-them-791e243f?mod=itp_wsj

TOPLEY’S TOP 10 – March 11 2024

1. NVDA 2024 vs. CSCO 1999

Barrons Burton G. Malkiel is the author of A Random Walk Down Wall Street, now in its 50th-anniversary edition.
Nvidia makes chips that are in high demand for training AI models. The company’s recent growth has been simply unprecedented. Earnings in 2023 grew by 769%. No large company even came close to that growth during the internet boom (Cisco was growing at 36%), and many stock market favorites such as Amazon had no earnings at all. AI has the promise to make enormous advances in productivity and could be as important as the Industrial Revolution. And if Nvidia grew its earnings at the rate expected by security analysts in 2024, it would be selling at only 33 times forward earnings. No wonder its supporters consider it a cheap stock. Nvidia today doesn’t resemble Cisco in January 2000.
https://www.barrons.com/articles/stock-bubble-tech-valuations-nvidia-b210713f?mod=past_editions


2. NVDA is Selling to Rest of Mag 7

Wisdom Tree Christopher Gannatti, CFA

Nvidia: We Are Watching History | WisdomTree


3. Historical Semiconductor Rally

Bespoke Investment Group The rally in semiconductors is starting to run out of superlatives to describe it.  Just when you think it has to take a breather, it turns around and rallies another few percent. Yesterday, the Philadelphia Semiconductor Index (SOX) closed more than 17% above its 50-day moving average and 36% above its 200-DMA.  Regarding the 50-DMA, it hasn’t even traded down to within 3% of that level in the last 80 trading days. In fact, the only time it has even traded within 4% of its 50-DMA since mid-November was on 12/6 when it closed 3.99% above that level.

https://www.bespokepremium.com/interactive/posts/think-big-blog/semis-drop-the-mic


4. Mag 7 Earnings vs. 493 Set to Balance Out Next Year

Barrons

www.stockcharts.com


5. Equal Weight vs. Cap Weight Forward P/E

Equities: The S&P 500 12-month forward P/E ratio is back above 21x

Source: The Daily Shot


6. Ned Davis Global Stock Optimism Getting Excessive


7. U.S. Dollar Fails Again to Make New Highs


8. Best Performing Sector Last Week was Utilities. +3.5%

XLU Still Below Highs.


9. Median Household Income is 41% Below Income Needed to Buy Home


10. Problems

Farnam Street Blog

Tiny Thought(s)https://fs.blog/
“We need to redefine “problems” into opportunities.
Problems are an opportunity to create value.
Problems are an opportunity to strengthen relationships.
Problems are an opportunity to differentiate yourself from others.
Every problem is an opportunity in disguise.”
**
“Talent and potential mean nothing if you can’t consistently do things when you don’t feel like doing them.”
***
“If you’re not willing to look like an idiot in the short term, you will never look like a genius in the long term.”

(Share Tiny Thought onetwo, or three, on X).

TOPLEY’S TOP 10 – Mar 07, 2024

1. Mag 7 Dispersion 2024

Jim Reid Deutsche Bank


2. FANG+ Short-Term Overbought/Oversold

Dave Lutz at Jones Trading Bespoke notes that Mega-cap divergence is real – AAPL is now more than three standard deviations below its 50-DMA.  It hasn’t been this oversold since March 16th, 2020, in the throes of the COVID Crash.


3. SMH-Semiconductor ETF

Huge increase in semi stocks….leaves RSI overbought at 83


4. Chart Update…NYCB Bank Did Break Below GFC 2008 Lows

I did not think I would see a bank break below 2008 crisis lows in my lifetime

www.stockcharts.com


5. Price Changes Cumulative Since May 2020

Jack Ablin-Cresset

If the US Economy Is Doing So Great, Why Are Americans So Glum? | Cresset Capital


6. Top 15 Wealth-Destroying Funds Over Past 10 Years

Morningstar Amy C. Arnott, CFA

https://www.morningstar.com/funds/15-funds-that-have-destroyed-most-wealth-over-past-decade


7. Bloomberg -Uninsurable Home Crisis 2018

By Leslie Kaufman,Saijel Kishan and Nadia Lopez


8. Salesforce Marc Benioff Buying Up Land in Hawaii

The Daily Shot Brief-Commodities: Gold is diverging from gold miners.

Billionaire Marc Benioff is buying up land in Hawaii. And no one knows why : NPR    Found at Morningbrew https://www.morningbrew.com/daily


9. Teacher Leaving the Profession in High Numbers

WSJ By Matt Barnum Public-school teachers like Sumner are still leaving the profession in higher numbers than before the pandemic, a Wall Street Journal analysis of data from 10 states show, though departures have fallen since their peak in 2022. The elevated rate is likely due to a combination of factors and adds one more challenge to schools battling learning loss and frequent student absences.

“This is still a discouraging story,” said Katharine Strunk, dean of the University of Pennsylvania’s Graduate School of Education. ”I don’t think this level of consistent attrition is sustainable for the school system.”

https://www.wsj.com/us-news/education/teachers-leaving-quitting-schools-data-302d282e


10. The Second Half of Life-Humble Dollar

The Changes Ahead

Dan Haylett  

THE SECOND HALF of life isn’t just a continuation of the first. Rather, it’s an opportunity for transformation, new adventures and deepening wisdom. As we navigate these years, understanding the five key stages of this journey can help us live more joyfully and meaningfully. What five stages? Here’s a look at each:

Phase 1: Pre-Rapture. This stage, typically between ages 45 and 60, is marked by a feeling of newfound freedom and independence. With grown-up children flying the nest, you might experience a mix of emotions—pride, nostalgia and perhaps a sense of loss. This is also, however, a time of great opportunity.

It’s a period to rediscover yourself, invest in hobbies or career paths you’ve always wanted to explore, and strengthen your relationships beyond your parental role. This phase sets the foundation for a fulfilling second half of life.

Phase 2: Transition. This is the prelude to retirement, when you start to ease out of full-time work. This could involve shifting to part-time or consulting work, or even beginning a completely new, less demanding career.

It’s a time for preparation—financially, emotionally and socially—for the full retirement that lies ahead. This stage is crucial: It helps you gradually adapt to a new way of living, ensuring the change isn’t abrupt, but instead a smooth segue into the joys of retirement.

Phase 3: Rapture. Welcome to the rapture stage—the golden early years of retirement, when you can live out the dreams you’ve been harboring for years. Whether it’s traveling to exotic places, dedicating more time to hobbies, volunteering, or spending quality time with family and friends, this stage is about fulfillment and enjoyment.

You might still be working in some capacity. But the difference now is that it’s on your terms. It’s a time of exploration, learning and experiencing the beauty of unstructured time.

Phase 4: Post-Rapture. In this stage, things start to slow down. Our late-retirement years are about finding joy in the quieter, more stable aspects of life. Your focus may shift toward creating a comfortable and safe living environment, maintaining good health, and enjoying the simpler pleasures, such as reading, gardening or spending time with grandchildren. It’s a time for reflection, appreciating the small moments, and maintaining a sense of community and connection.

Phase 5: Fragility. This is the twilight of life. It’s a time when health and mobility may decline, and you become more dependent on others for care and support. This stage calls for a dignified approach to aging—acknowledging limitations while cherishing the life you’ve lived. It’s about ensuring comfort, receiving appropriate care and staying connected with loved ones. It’s also a time to pass on wisdom, share stories and leave a legacy that reflects the richness of your life’s journey. 

So, what does all this mean for you? Living a rapturous second half of life is about embracing each stage with awareness and grace. By understanding and preparing for these phases, you can ensure that every chapter of your life is lived with purpose, joy and a sense of fulfillment. Remember, every stage has its beauty and its challenges, and it’s up to you to make the most of them.

Dan Haylett is a financial planner and head of growth at TFP Financial Planning, a U.K. firm that specializes in modern-day retirement planning. Dan’s “pull back the duvet every morning” purpose is helping clients spend their time and money on what’s truly important to them. A version of the above article first appeared on Dan’s website, where you can also learn about his Humans vs. Retirement podcast. Follow him on X (Twitter) @DanHaylett.

 

https://humbledollar.com/2024/02/the-changes-ahead/   found at Abnormal Returns www.abnormalreturns.com

TOPLEY’S TOP 10 – Mar 06, 2024

1. EU Apple Fine Followed by China IPhone Sales -24%

Apple’s iPhone Woes in China Deepen With a 24% Sales Plunge-Bloomberg By Vlad Savov

Apple Inc.’s iPhone sales in China fell by a surprising 24% over the first six weeks of this year, according to independent research that may stoke fears about worsening demand for the marquee but aging device.

https://www.bloomberg.com/news/articles/2024-03-05/apple-iphone-sales-in-china-plummet-24-as-vivo-not-huawei-becomes-best-seller?sref=GGda9y2L


2. AAPL Chart

Watch for 50day to go thru 200day to downside…Approaching November 2023 Lows….RSI 23 short-term oversold.


3. AAPL vs. Mag 7

Zerohedge

https://www.zerohedge.com/markets/gloom-doom-apples-iphone-sales-china-plunge-24

 


4. Nasdaq has gone more than 300 days without a major pullback

Marketwatch Joseph Adinolfi

The tech-heavy Nasdaq has gone 303 trading days without a major pullback.

The tech-heavy Nasdaq-100 has gone 303 trading sessions without a pullback of 2.5% or more, the third-longest stretch since 1990, according to Jonathan Krinsky, chief market technician at BTIG.

While this doesn’t necessarily mean the artificial-intelligence-driven boom in U.S. stocks is ripe for a selloff, Krinsky thinks the market is overdue for a bout of volatility.

“Some sort of shakeout is likely coming, in our view,” Krinsky said.

The Invesco QQQ Trust Series ETF QQQ, which tracks the Nasdaq-100 and is one of the most popular U.S.-traded ETFs, has marched to 14 straight record highs in 2024. It’s most recent record arrived on Friday, when the ETF rose 1.5% to finish at $445.61.

According to FactSet data, the most recent pullback of 2.5% or more occurred on Dec. 15, 2022, when QQQ fell 3.4%.

Notably, the Nasdaq-100 has been achieving these records without the help of Apple Inc., AAPL, -2.54% once considered an indispensable constituent of the index. While Apple was down 9.1% so far this year, the Nasdaq-100 was up 8.3%, according to FactSet.  Divergence in the performance of a popular group of megacap technology stocks has been growing since the beginning of 2024, while all of the so-called Magnificent Seven tech stocks helped drive gains for the S&P 500 in 2023.

Take Monday’s session for example: Nvidia Corp. NVDA, +3.60% is up 3.6% on Monday, while Tesla Inc. TSLA, -7.16% was down 7.2%. Alphabet Inc. GOOGL, -2.76% was down 2.8%. And Apple AAPL, -2.54% was down 2.5%.

“… [T]he dispersion under the surface shouldn’t be ignored. Yes, it’s encouraging to see some broadening beyond the ‘AI’ trade, but the continued one-way move in many momentum names is ultimately going to have some ramifications, even if only short-term in nature,” Krinsky said.

The weakness in several megacap names weighed on the Nasdaq on Monday.

Both the Nasdaq-100 NDX, which includes the 100 largest nonfinancial stocks trading on the Nasdaq, and the Nasdaq Composite COMP, which includes more than 3,000 stocks listed on the exchange, finished 0.4% lower. The S&P 500 SPX also eked out a loss after briefly turning positive. The Dow Jones Industrial Average DJIA finished lower as well.

https://www.marketwatch.com/story/nasdaq-has-gone-more-than-300-days-without-a-major-pullback-does-that-mean-a-shakeout-is-overdue-a8afb112?mod=home-page


5. Sometimes Chart Tells the Entire Story….NYCB -70%


6. KRE-Regional Bank ETF…

Failed twice at 200-day


7. Microstrategy Going Up with Bitcoin…Breaks Above 5-Year Highs

50week thru 200week to the upside on long-term chart


8. Top 10 Showed Gold Breakout Yesterday….Gold Miners Large Lag

The Daily Shot Brief-Commodities: Gold is diverging from gold miners.

Source: @TheTerminal, Bloomberg Finance L.P.


9. Bitcoin ETF AUM Update

https://www.barrons.com/articles/bitcoin-price-crypto-etf-wall-street-big-banks-c6547db0?mod=past_editions


10. Why You’re Scared of Investing (and how to overcome it)-

My heart is racing. My hands are so wet from my sweat that I can’t even get a good grip on the computer mouse.

After hearing many stories from people who lost money, I feared investing. But I still to get in on the game. I wanted to get rich badly.

But my stomach felt like it was inside out. I collected all the courage inside me. Then, I finally did it. Boom! I bought my first stocks.

This was in 2007, and I STILL remember how I felt. That’s how scary investing is. Over the years, I started to control my emotions to a degree that I don’t even feel the slightest itch when I invest my money.

That’s because I found ways to overcome my fear of investing.

What follows is a list of 5 common reasons most people fear investing and a practical way of overcoming the fear.

1. Fear of losing money

The fear of losing money is a primal instinct, deeply ingrained in our psyche. It’s tied to our survival instincts. After all, for much of human history, losing resources could mean life or death.

This is reflected in the concept of loss aversion:1 The pain of losing is psychologically twice as powerful as the pleasure of gaining.

This means we’re more likely to avoid investing because we fear the potential losses more than we value the potential gains.

Overcoming it: The founder of modern-day investing, Benjamin Graham, famously said:

”The investor’s chief problem—and his worst enemy—is likely to be himself.”

To overcome this fear, we need to change our mindset. First, understand that investing isn’t gambling.

It’s about making calculated decisions based on research and analysis. Second, diversify your portfolio.

As the saying goes, don’t put all your eggs in one basket when you start. While many successful investors got rich by concentrating on their portfolios, I don’t think it’s wise to start picking individual stocks. This is also why many people get scared of investing.

You’re much better off buying a broad index like the S&P 500 when you start. You can concentrate on your individual investments later.

2. Lack of knowledge

Investing can seem intimidating if you don’t understand how it works. This fear stems from the Dunning-Kruger effect, a cognitive bias where people with low ability at a task overestimate their ability.

This leads to a paradox: the less you know about investing, the more confident you might feel, leading to risky decisions.

But as you learn more, you realize how much you don’t know, which can lead to fear and hesitation.

Overcoming it: Knowledge is power. Start by educating yourself about the basics of investing.

Read books, listen to podcasts, take online courses. As legendary investor Warren Buffett said:

”Risk comes from not knowing what you’re doing.”

The more you understand investing, the more confident you’ll become. Just remember you also don’t need to have a PhD in Finance to be a good investor. Basic knowledge is enough.

3. Fear of falling behind

The fear of falling behind, also known as FOMO (fear of missing out), often prevents people from building wealth in the stock market.

Humans seem to be naturally competitive. Social media makes this even more visible, as people feel unsatisfied when they watch other folks live a “better” life. We tend to define our worth based on how we stack up against others.

This behavior sometimes translates to our investing strategy. Which leads to risky behavior, such as jumping on an investment bandwagon without doing your research.

Overcoming it: Remember that investing is a long-term game, not a get-rich-quick scheme.

As Peter Lynch, one of the most successful investors of all time, said:

”The real key to making money in stocks is not to get scared out of them.”

Focus on your financial goals and stick to your investment plan, regardless of what others are doing.

4. Reacting to market volatility

Market volatility can be scary. When the market takes a downturn, our natural instinct is to panic and sell.

This reaction is linked to the fight-or-flight response. I experienced that feeling when I lost around 60% of the money I first invested in the stock market.

Overcoming it: It’s crucial to stay calm and stick to your long-term investment plan during market volatility.

The economist Paul Samuelson said it well:

”Investing should be more like watching paint dry or watching grass grow. If you want excitement, take $800 and go to Las Vegas.”

What do you do when you paint your walls? You leave it alone and simply get on with your life. Do the same with your investments.

5. Fear of commitment

Investing often means locking away your money for a significant period, which can feel daunting.

There is always the fear of uncertainty. What if the market suddenly crashes and you need to use that money after all? What if you suddenly need to take a one-month vacation, but don’t have the money for it? These fears keep many people scared of investing.

When you get down to it, there are two main goals that every investor aims for: Liquidity and growth. Liquidity is about how easily you can turn an investment into cash without losing its value.

It’s important because having liquid assets means you can quickly access funds for emergencies or unexpected expenses. On the flip side, growth is all about increasing value over time. This is crucial for building wealth and reaching financial goals like retirement or buying a house.

But when it comes to investing, you can’t have total liquidity and maximum growth simultaneously; there’s always a trade-off. The key is finding the right balance between the two.

Overcoming it: Maintain an emergency fund that covers 3-6 months of living expenses.

This will give you the peace of mind to invest your other funds without worrying about accessing them in an emergency.

Embrace the future: Conquer your fears today

Always remember this as you’re investing: The regret of not taking action today could be far greater than any fear you’re experiencing now. Think about that whenever you find yourself scared of investing.

Imagine yourself 10, 20, or even 30 years from now. You look back on your life and realize you let fear dictate your financial decisions.

You missed out on opportunities to grow your wealth, to secure your future, to provide for your loved ones. That regret can be a heavy burden to bear.

We’re more likely to regret the things we didn’t do than the things we did. And when it comes to investing, the cost of inaction can be high.

Yes, there will be risks. There is always risk in every part of life. But as long as you invest sustainably and consistently, you will grow your wealth in the long term.

As American entrepreneur and motivational speaker, Jim Rohn, said:

“We must all suffer one of two things: the pain of discipline or the pain of regret.”

Choose wisely.

https://dariusforoux.com/scared-of-investing/