People who work in product development and marketing are
pretty smart. Just watch TV for a bit
and see all of the commercials for various things. And watch late night TV for those amazing
infomercials! Watch enough of them and
you too would be convinced you need the latest, greatest gadget!
But every so often, I just have to laugh. Recently, I was reading the financial press
and came across an article on a new mutual fund with a new strategy that is
becoming popular.
(Please note that I am not recommending any type of
investment. Check with your financial
and/or tax adviser. Your mileage may
vary. Batteries not included. Results not typical. May cause all sorts of side effects. If anything happens to you, consult with your
doctor immediately!)
It stated that the investment strategy provides about half
of what the market earns each year, but it tries to avoid losses.
It went further to state that the type of investors in that
fund are typically people who don’t swing for the fences, and avoiding losses
is just as important as earning gains.
Why did this catch my eye?
As I read this, I realized that this type of thing already
exists and works even better than this “new” strategy by providing guarantees.
Those who don’t study history are doomed to repeat it. It’s sort of like reinventing the VCR!!!!
But the popularity of this “new” strategy is what got
me. The key to building wealth is not to
lose. Using a baseball analogy, you will
win more games by hitting singles and doubles, but not striking out.
Instead, most people want to achieve the highest gains. That means swinging to hit home runs. But most home run hitters tend to strike out
often. And tend to lose often.
When it comes to your finances, are you trying to hit
singles and doubles, or are you trying to hit home runs?
