Yesterday I wrote about insanity. An important idea to consider. But today I want to bring some balance and write about another form of craziness.

 When I said yesterday that you should evaluate your retirement plan, I was dead serious. The problem is that some people have a funny notion to check daily!

 It is pure craziness to invest today and expect to make a profit tomorrow! It is different if you speculate! When I buy futures and play the currency market, it is like a job – I am involved full time and I might lose a lot of money if I am not on the ball. But that is not investing!

 It is pure craziness to invest for a 10 or 20 year time frame and to expect your investment to increase in value by the minute – and to be despondent when it does not happen!

 This craziness about short-term gains in a long term portfolio leads to an even bigger craziness! Suddenly people start making changes to their portfolio’s as if they are indeed trading. Always selling and buying in an effort to make more profit. Over and above the fact that dealing costs may wipe out the profits, they very often sell at a loss in an effort to buy a new investment that will make a profit.

 Understand this – I have also sold shares at a loss to rather buy a better performing share. That is not what this is about. This is about the person who buys a share in expectation of better results and then promptly selling two days later because the share price did not move.

 Craziness in this sense means that you confuse the purpose and time frame of your investments and your investment activities. And you can only lose!

If you are not like this, you may not believe it, but there are people who phone very excitedly to say:  “did you see investment XYZ is up by so much!”  ANd then the next day they phone very aggravatedly to say: “did you see investment XYZ is down?  What’s going on? What are you doing about it?”  That is craziness and a pain in the you-know-what!

 

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