Being a Better Long-term Investor

We tend to bring our biases everywhere and we interpret information according to these biases. It is human nature and often hard to escape. We tend to be heavily influenced by recent and previous events or trends.  In order to become a better long-term investor, there are some things to know.

Information and News

Every day we are bombarded by new information and investment news, which we use to make decisions. This should be a taxing process, but our brains make it easier by using mental shortcuts that help us make a quick decision without the need for lengthy analysis. These mental strategies are known as heuristics. Heuristics may help us save time, but may lead to errors in judgment. There are many behavioral biases and some of them should be all too familiar: Biases that affect our decision-making processes include anchoring (relying heavily on one piece of information), over-confidence, fear, confirmation bias (only searching for information supporting your belief), over-extrapolation and greed, to name but a few.

Investments require time to be successful. The triggers, mistaken beliefs and psychological traps that drive our investment behavior often cause irrational acts, which can destroy wealth.

Consider the Global Financial Crisis: Equity funds enjoyed excellent returns in the 5 years leading up to the 2008 crash. These returns caused investors to flock to the stock market, which drove the market even higher. Then came the crash and those very same biases, that once drove investors to the market, had led them to the biggest sell-off in the market’s history. Many investors found that, had they not succumbed to their biases, their losses would have existed largely on paper.

In fact, investors who did not give in to their emotions managed to make back their losses and, in some cases, almost double their money (in absolute terms) by September 2016.

It is important to note that this strong recovery was in part driven by the monetary policies devised by the central banks to increase asset returns globally. Previous market crashes have taken longer to recover in absolute terms and longer when one accounts for inflation.

What about stable funds?

Stable funds function to protect the investor’s capital. If you are averse to risk and seek stability then this is probably the best fund for you. This doesn’t mean that some investors in a stable fund are immune to emotional behavior. Many investors in stable funds tend to over-extrapolate short-term performance trends, which in turn informs their decision to invest or withdraw. The problem arises when investors withdraw on a downward trend and thus don’t benefit from the performance on the inevitable upward trend. This is why they don’t achieve the same returns as the unit trusts in which they are invested.

 So what should you do?

Overcoming one’s biases can difficult, but the first step is identifying them. Try and assess the information you receive and only use it when relevant. This increases your chances of seeing a better outcome. It is a good idea to find an investment manager you trust, who employs an investment philosophy that aligns with your goals. Make sure you understand the unit trusts you have invested in. This will make it easier to remain calm during periods of fluctuation, allowing you to benefit from the eventual upturn.

Dips in performance lead to lower prices, which generally makes it a good time to add to your portfolio (if you have the means to expand). In the end, it is the combination of heuristics/investor behavior and market/fund performance, which determines investor returns.

Try and identify your own personal biases and try to overcome them. This will allow you to make more rational decisions. Listen to your financial advisor and stick to an investment strategy tailored to your needs. Short-term market volatility is common and should not affect your long-term strategy. It’s easy to slip into old patterns, but a good financial advisor can help you make rational sense of all the information you have and help you stick to your plan.

Copyright 2017 Original content authorized only to appear on Money Beagle. Please subscribe via RSS, follow me on Twitter, Facebook, or receive e-mail updates. Thank you for reading.

Your Opinion: It’s Not Just What You Say That Matters, It’s How You Say It

Facebook has been an interesting place lately.  The easiest way to put it is that everyone seems to have an opinion about something.  And everybody wants to hear it.  But I’ve noticed something lately.  For me, it’s not just your opinion that makes what you say interesting, it’s how you present it.

Nearly Everything Is Polarizing, It Seems

I’m not going to get into my thoughts on the various things that are polarizing the nation. We have racial issues, a President, and so much more that has people fired up.  In many ways, that can be a good thing.  But, I’ve seen a lot of viciousness, so often it’s a sad thing.

With everything so polarizing these days, it’s hard to stay out of the crossfire.

When Everyone Has An Opinion, Who Can You Listen To?

One thing about what I’ve seen lately is that just about everybody thinks that they’re right.  And that the opposite opinion is wrong.  They’re all willing to lay it out reason by reason.  One thing for sure is that even when one side lays out their reason, they’re not going to get their opinion changed even if they let the other side lay out their reasons.  Which, let’s face it, many conversations these days don’t get that far.

But it raises an interesting question, when you have SO MANY people talking all over the place, who can you listen to?  Let’s face it, the amount of people that you have exposure to about various issues is tremendous nowadays.  Think about it.  Facebook is great for catching up with people you otherwise would have lost touch with, right? But, knowing how your old high school locker buddy is doing also means that you now get their opinion on, well, everything.

So, who do you listen to?

For Me, It’s About Respect

I try to limit everything that I read about polarizing issues.  These things are important, but I can only read so much.  Even if I read everything, how much new information are you getting after a certain point?  Probably not much.

Sometimes the discussions make me think.  What I’ve noticed personally is that the people who rant and rave get through to me less than those who may have the exact same opinion, but who lay it out calmly.  There’s one woman in my Facebook feed who is SO fired up about some stuff going on that she posts strongly worded opinion posts at least every hour.  I’m not kidding.  And they’re not for the faint of heart.

They really don’t get through.  And it’s not because I am agreeing or disagreeing, it’s just that because she treats every single thing she says as THE MOST IMPORTANT THING YOU’LL READ, it works out that none of it comes across as important.  It’s probably not her intent, but think about it.

When Expressing Your Opinion, Leave Some Room

Personally, on some of the stuff that gets through, it comes through on some of the most subtle and lightly worded posts out there.  Why?  Because when someone writes something that gets the point across without being forceful, guess what happens?  It leaves some room.  It leaves empty space for anyone reading to fill it in with their own thoughts and opinions.  That’s your opportunity to persuade people.

That always worked for me when it came to learning.  Looking back at teachers and professors that I liked, they didn’t try to force feed me thoughts and ideas.  The ones I despised were those that were so forceful with what they were trying to teach that it didn’t leave me room to form my own thoughts.

So, whatever your opinion on the matter of the day, remember your opinion may be less important than how you present it.

I Need To Practice What I Preach

These past months have been eye opening.  It’s interesting because I’ve written this entire piece saying how getting loud is not the key to being heard.  I need to practice that better in other areas.  One of my biggest things I would change about myself is that I know I raise my voice to get through to my kids.  Obviously, if being ‘YELLED AT’ in some way doesn’t get through to me, I shouldn’t expect it to work in reverse.  That’s becoming a personal challenge I’m putting in place.

Readers, what persuades you?  What immediately gets you to stop listening?  How do you try to get through to others?  Please share your thoughts in the comments below.  Thanks for reading.

Copyright 2017 Original content authorized only to appear on Money Beagle. Please subscribe via RSS, follow me on Twitter, Facebook, or receive e-mail updates. Thank you for reading.

Cryptocurrency Is The Next Buzz Word To Know

If you’d have asked me six months ago what cryptocurrency meant, I would have had no idea.  I probably would have ventured a guess that it had something to do with Bitcoin.  That part, as it turns out, is true.  Lucky guess on my part.

To be honest, I still don’t know much about cryptocurrency, but I know that it’s taking off.  I don’t have enough knowledge to explain what it is or what the benefits and risks are beyond a passing conversation, so this article won’t do that.

But I will tell you that it is something that people should know about.  Here’s why:

Cryptocurrency Is Digital

Everything is digital these days.  You can do everything online.  Take a picture and it’s instantly available and on the cloud.  You can converse with friends, family, or complete strangers.  If you need to buy something, you can take care of your needs all through a digitally connected device.  When you need a ride, you can get that, too.

See where I’m going with this?

Everything is available through your digital fingertips, so it sort of makes sense that a digital currency system would evolve.

Cryptocurrency Is Not Online Banking

Image courtesy of Pixabay

One thing that always confused me when I heard about Bitcoin, which is the first cryptocurrency (though there are no many more) was that I couldn’t figure out how it was different than online banking.  It turns out that it’s an entirely different thing altogether.

Your typical banking website is a platform that gives you information based on your currency that’s used.  In other words, it’s giving you information about the transactions.  The transactions themselves are using currency.  Cryptocurrency is now a real thing.

Cryptocurrency Works Because It’s Secure

In order for a currency to be a real thing that people will actually use, it has to be secure.  This holds true with the good old American dollar, for example.  Banks keep your dollars safe.  Gold that has value in proportion to the dollar is kept safely guarded.  People demand that currency itself be secure before they trust using it.

So is the case with cryptocurrency.  Since it’s digital currency, all of the security is also digital.  You won’t see a security guard keeping watch over your cryptocurrency.  The security comes from terms like blockchain and wallets, information of which I just can’t squeeze into this article.  Thankfully there are lots of resources out there, from investment articles to contacting experts such as Brock Pierce of Blockchain Capital.  If you’re really interested in taking your knowledge of cryptocurrency to the next level, there are some great resources out there.

The Bottom Line

There are a million more facts about cryptocurrency.  There’s a lot to learn about how you use it.  Or how you invest in it (just like you can invest in other currencies).  As with anything financial related, go ahead and get familiar with it before you use it or invest in it.  I’d suggest learning more now because one way or another, it looks to be making a place as part of our everyday world.

Copyright 2017 Original content authorized only to appear on Money Beagle. Please subscribe via RSS, follow me on Twitter, Facebook, or receive e-mail updates. Thank you for reading.

5 Side Hustle Ideas to Make Extra Cash

If you’re like most Americans, you think that your paycheck isn’t large enough and your bills are too large. Unless

Image from morguefiles courtesy of Domas

you can demand a raise, you might think that you’re stuck, but there are dozens of different ways that you can earn some extra money on the side. Getting a second source of cash can completely change your finances.

Uber Driver

If you haven’t heard of Uber by now, you’ve probably been living under a rock for the past several years. Just in case you don’t know what it is, Uber is essentially a taxi service, but it lets just about anyone be the taxi drive. You use your own car, and people looking for rides can use the app to find a driver.

One of the best parts of being an Uber driver is that you only drive when you have the time. That means that any weekends when you have nothing to do, you can hop in your car and start earning some extra cash on the side, it’s as easy as that.

There are a few requirements that you’ll have to meet before you can be an Uber driver, but most people shouldn’t have a problem qualifying. You have to have a 4-door sedan that can seat at least 4 or more passengers, have a car that was built in 2001 or more recently, has in-state plates, and the car must pass their vehicle inspection. As long as you meet those requirements, you’ll be able to drive for the Uber service.

How much money that you make is going to depend on where you live and how much time you devote to driving. There are a lot of people that make a sizable second income by driving in the evenings and on the weeks. If you live in a city that has a lot of popular events, like concerts or sporting events, capitalize on the people coming into the city and make sure that you’re available to drive on those nights.


If you like to make some hand made goods, then Etsy is the place for you. You can turn your crafting hobby into a source of extra spending money. Etsy will allow you to create a shop and start selling your goods in a matter of minutes.

One of the best parts of Etsy is that it allows you to sell just about anything you can create. It has everything from jewelry and clothing to furniture and paintings. If you enjoy making anything, then you can put a price on it and put it on Etsy. There are going to be some small fees, but it’s still an excellent way to make extra cash.

Survey Sites

Maybe you don’t want to dedicate a lot of hours to earn extra money, but you still want to have some spending money in your pockets. One of the most popular ways is to join a survey site. These sites work with large companies to create surveys that they will deliver to customers and get the responses.

Companies are always looking to see what their target audience thinks of their products or services. With these survey websites, you’ll get rewarded for every survey that you complete. Each website is going to give you a different amount for filling out a survey. These sites are not going to make you a ton of money, but it’s a simple way to earn extra money just by clicking your mouse.

The best part is that you can do these surveys anywhere. You can do them on your lunch break, while you’re on the bus, or while you wait in the doctor’s office. Instead of sitting around waiting, you can make some spare change.

Make a Blog

Creating your blog can be one of the most fun side hustles, but it can also be one of the hardest. There are millions of blogs out there that people never make any money off of, but there are also people that make a decent wage by putting new content on their site. You can make a blog about anything. Find something that you enjoy talking about, think of an interesting way to package it, and then create your blog. You can make money by selling advertisement space or by partnering with companies to do sponsored posts.

It’s important to note that making money off of a blog is not going to be a “get rich quick” scheme. It may take a while, but it will be worth all the work.


Freelancing is another side hustle that can net you some serious profits. Depending on what your skills are, or what you’re an expert in, you can earn just as much freelancing as you do with your full-time job. There are plenty of people that quit their day job to start freelancing instead. Find something that you’re good at, or that people need, and start doing extra work after you leave your job every day.

Making Extra Money on your Side Hustle

There are plenty of ways that you can make money. If you’re like most people, you aren’t going to complain about having more money in your bank account. Don’t let anything stop you from starting a side hustle and putting extra dough in your pockets every month.

Copyright 2017 Original content authorized only to appear on Money Beagle. Please subscribe via RSS, follow me on Twitter, Facebook, or receive e-mail updates. Thank you for reading.