I bet you didn’t think your workout program design and investment strategy were related, or at least should be, did you? Let me explain.
1) A month is enough.
In my former life as a professional baseball player, I was exposed to a myriad of training styles written by countless strength coaches. Some routines changed daily. Others seemed to last for months. I learned that one month (or so) is the magic timeframe to revisit/redesign your workout program. Any longer than that and your mind gets bored of the routine while your body adapts to it - both bad. Any less than that and you don’t give yourself adequate time to realize performance gains.You sell yourself short by switching your routine too soon.
Just like proper training program length, at Beck Bode we trade on behalf of our clients every 4-6 weeks. We know that analysts regularly revise their earnings estimates both up and down. If we sell immediately after a downward revision, that analyst could quickly change his/her mind and revise back upward, but we no longer own the stock. If the revision stays down for a month, however, it’s time to sell and replace the stock with one that has a brighter future.
2) Anchor down.
In strength training, there are time tested exercises that work, like the deadlift and the squat, for example. These exercises can be referred to as anchor exercises that should, in some form, turn up in nearly all your training programs. Other complimentary exercises get mixed in over time, but your anchor exercises, the ones that will give you the best results, can be attributed for the bulk of your performance gains.
We use an investment strategy that allows us to hold stocks as they ride an upward trend. In a few years, those stocks will result in the majority of portfolio gains, thus anchoring clients’ accounts. Yes, we select other stocks during that time - some that decline right away, some spike then decline, some stay static, some decline then rise, and the rest perform just about every other permutation of gains and losses you can imagine, but the goal of a portfolio is to weather those storms with your anchor stocks and lean on them to achieve your desired results.
3) Wait, I can do that.
Both your workout program and your investment strategy should be easy enough to comprehend that anybody can replicate it, once. You can write your own workout for a month by reading a couple health and fitness magazines. Likewise, you can watch, listen to, and read analyst recommendations on companies to buy, and you can put together a pretty decent portfolio.
But what happens when it’s time to change your workout routine? How do you build off your previous month to continue working toward your goals? What exercises should be included, and in what rep scheme?
When do you know it is time to sell the stocks you own, and what should you replace them with? When will you sell those replacements? What do they get replaced with?
The best workout programs and investment strategies are simple, but not simplistic.
4) Give up control.
Because I had the amazing opportunity to play baseball professionally, I’ve met and trained with some of the best minds in sports performance, and all of them will agree that when they write their own training programs, eventually it catches up to them. It’s human nature to keep doing what you like to do and disregard the things you don’t. When it comes to exercise selection, that means you program workouts with the exercises you like and ignore the ones you can’t stand. But the ones you hate probably add a lot of value toward reaching your goals. Thus, sometimes it’s better to delegate your program design.
Similarly, when you are picking your own stocks and it becomes emotional, you’re in trouble. If you hold on to stocks because you like them and have a hunch they are on their way up, you may be right, but you’ll be wrong a whole lot more. It’s hard to get rid of things you like, but if you don’t have the data to back up your decisions, and no, I’m not referring to the talking heads on tv - remember DRAMA BOOSTS RATINGS, then give up control and let someone else who DOES have data make the decisions for you.
5) Get off the elliptical.
In this case, the elliptical represents that “thing” everyone else is doing. That “thing” can be the elliptical, a diet cleanse, spin class, bootcamp, metabolic conditioning, high intensity interval training, powerlifting, yoga, fasting, pilates, etc. None of those things are bad. All add value in some way.
However, hopping on a bandwagon and hoping your results are just as good as the next guy is very, very bad. People are unique. Each has a different physiological makeup, and thus each has different training demands. If someone who is in great shape says barre class is the answer, does that mean barre class is your secret sauce, too? No, not necessarily, but to blindly follow because that’s what others are doing is always a mistake.
Even if that mistake works out, you have 99 failures waiting for you if you continue to make decisions based on others’ results. If, after experimenting with other training modalities, however, barre class gives you the best results, then yes, by all means keep it up. Just don’t do it because everyone else is.
Funds are the elliptical of the investment world. They feel safe. Everyone is investing in them. Results seem to be ok for everyone else you talk to, so what the heck? Even if results are subpar, at least you’re doing what everyone else is, right?
Look, mutual funds, ETF’s, etc, just like ellipticals, aren’t bad. Investing in them because you have no idea what else to do is bad. Investing in them because everyone else does is bad. Don’t make an uninformed decision on something as important as your life savings.
Your life savings, just like your health, needs careful attention. Why waste either by not educating yourself on what best suits your needs?