Using the right mindset and strategies for the long-term gain
Whether we invest for the long term or short term, we must first adopt an infinite game (see reference below) mindset. That is, we focus on risk management first and growing money over a long period of time, rather than over-sized trades based on news, talk shows, and etc.
Like any game, we need to have the right strategies. First, I would like to stay in the social trend that has a long-lasting impact on how we live, work and play. Currently, we are in the 4th industrial revolution, or digital transformation era, so I choose sector ETFs or companies that are leading this trend as our investing instruments. Doing my own research to identify those sectors and companies is critical. Second, setting the time horizon to 3-5 years. This is important, because with this kind of horizon, time will be on my side, and I can deploy my strategies accordingly. For equity investment, I use the dollar average strategy to accumulate my investment. I welcome significant price reductions and use them as opportunities to add to my investment. There are many options strategies that I mentioned in my other posts, so I will skip it here. Finally, being disciplined in terms of the size of each trade, stop-loss, and profit-taking rules.
Mistakes will be made, but the key is to prevent a disaster from a small mistake. Being in an infinite game, we simply need to always compete against ourselves, our emotions and biases, and reserve our capital to play this game as long as possible.
Carse, James P. (1987). Finite and Infinite Games. New York: Ballantine Books. ISBN 978-0-345-34184-6.
Like any game, we need to have the right strategies. First, I would like to stay in the social trend that has a long-lasting impact on how we live, work and play. Currently, we are in the 4th industrial revolution, or digital transformation era, so I choose sector ETFs or companies that are leading this trend as our investing instruments. Doing my own research to identify those sectors and companies is critical. Second, setting the time horizon to 3-5 years. This is important, because with this kind of horizon, time will be on my side, and I can deploy my strategies accordingly. For equity investment, I use the dollar average strategy to accumulate my investment. I welcome significant price reductions and use them as opportunities to add to my investment. There are many options strategies that I mentioned in my other posts, so I will skip it here. Finally, being disciplined in terms of the size of each trade, stop-loss, and profit-taking rules.
Mistakes will be made, but the key is to prevent a disaster from a small mistake. Being in an infinite game, we simply need to always compete against ourselves, our emotions and biases, and reserve our capital to play this game as long as possible.
Carse, James P. (1987). Finite and Infinite Games. New York: Ballantine Books. ISBN 978-0-345-34184-6.
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