If you ask thirty of your friends that invest in the stock market what their average returns have been for the last decade, chances are that their returns are all within a same range of returns give or take 5%. However perhaps one will stand out of the crowd, averaging 15%, 20% or even 25% annual returns. And chances are that this one person that has drastically outperformed everyone else is doing something drastically different than all the others.
This simple exercise alone should tell you something. Find out what every other investor is doing out there and do the opposite or do something different. Don’t just do the same thing that they are doing, because it will lead you on the road to nowhere. Just as I stated in a previous blog (link) that most people are so lazy that they want someone else to even tell them what to think, most investors are the same way. They’re unwilling to put in the time to learn how to make steady, phenomenal returns, so they let someone else do their thinking for them – mostly large global investment firms. But think about this. If the large global investment firms were doing the best thing for these clients, then most of these clients would state that their portfolios return phenomenal returns every year. The fact that they don’t indicates that most likely you should be doing something very different from how the major investment firms manage your stock portfolio.
To me, contrarian investing isn’t just about buying stocks when people are selling and selling stocks that people are buying. To me, this isn’t contrarian investing at all. To me, contrarian investing is about identifying opportunities that 99% of other investors haven’t. By definition, to build substantial wealth from investments you have to get in at the bottom of the market and sell at its height. That means you have to identify opportunities before anyone else does, and buy assets that make people say “you bought what?" because they never considered buying them.
In a previous entry, I discussed fast food and the fact that most people are not even aware of what’s in the food that they are eating. If you’re wondering what makes McDonalds fries taste so good, it’s the beef flavoring they use. Out of deference to outraged Indian Hindus that believed that potatoes were actually a vegetarian product and to whom cows are a sacred animal, McDonalds has stopped using beef flavoring in their French fries in the Indian market. By digging down the rabbit hole of the food industry you discover interesting things about the foods you consume. And digging down the rabbit hole of investing is the ONLY way to build wealth.
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J. S. Kim is the Managing Director of SmartKnowledgeU™. He has over thirteen years of experience in finance and financial services, and has earned a BA in Neurobiology from the University of Pennsylvania, a Master in Public Affairs from the University of Texas at Austin, and an MBA with a concentration in finance from the McCombs Business School, University of Texas at Austin. He is the inventor of the revolutionary MoneyPing™ investment strategies, a novel approach to learn how to build wealth, not just dreams.
To learn more about how to dramatically decrease risk and intelligently increase the probabilities of 25% or higher annual returns, click the following link MoneyPing™ Your Way to Wealth