Set It and Forget It

When you invest in a company, invest no more than you can afford to lose while adopting the set it and forget it theory.

Don’t be a day trader in that stock or company.

Day trading is pure misery, and you won’t win anyway.

You’ll never beat the high frequency traders.

You’ll never beat the big boys.

They know every trick in the book.

You won’t take down Wall Street; Wall Street will take down you.

If you don’t have the guts to invest in a company, don’t invest.

You either believe in the company or you don’t.

Forget about taking a little off the top.

Ignore practicality.

Be a hog.

Have courage and forge ahead.

Beg to be slaughtered.

Now, of course, there are always going to be extenuating circumstances that will make you rethink your position.

If new information comes along that leads you to believe that your investment is in great jeopardy, then leave.

If you leave, don’t go back.

It’s the only way I know of to immunize yourself against day trading.

Here is why day trading and getting in and out of a company doesn’t work. It’s also the same reason why the set it and forget theory does work.

Let’s say that you have $10,000 to invest in a company. You do so, and your value in the company after ten years goes up to $100,000. Suppose that you decide to take your profits at that point in time. You sell, after which the stock drops to $80,000.

You then think about getting in. Are you going to invest $80,000 back into the stock?

No. You are not going to invest $80,000. You are not going to invest $80,000 at all.

You are a human being driven by fear.

You have already gotten your profits, and you don’t want to lose those profits. So what you will do is put in a much smaller amount. You’ll probably invest only $20,000 max.

Suppose that after you re-invest your money, the stock after 10 years goes up 10 times again. What will your profits be then?

If you reinvest $20,000, you will net $180,000 in profits on the second go around.

If you had left your money in and not taken profits, your total net would be $990,000.

That’s a heftier chunk of money than 90,000 plus 180,000 or $270,000.

Leave your money in.

Play the long game.

If you win, you win.

If you lose, you lose.

When you take this approach, you immunize yourself against the hucksters and the scaremongers in the media.

The Wall Street Journal has no power over you.

CNBC has no power over you.

If you win, you win big.

If you lose, what have you really lost?

You would only lose what you could afford to lose which in this case is $10,000, not a life destroying loss.

It’s not like you don’t have other investments, right?

If you don’t, you should. Never bet more than you can afford to lose.

But when you do bet, set it and forget it.

Sincerely,

Archer Crosley

Copyright 2021 Archer Crosley All Rights Reserved