A few weeks ago we went for a drive into Glacier National Park. The gray clouds were hanging low encapsulating the mountains and the only other visitor we saw at the viewing spot along Lake McDonald in Apgar quickly left.
What has this to do with safe investing you ask? More than you may realize or in the case of our visit to Glacier, more than we could see.
There are days, even weeks when the markets tumble and our investment software gives us sell signal after sell signal and we question the buy signals because, well the markets are going down. Our human emotions start to make us question the validity of our investment software’s strategies and the recommendations and this is almost always worse than taking the investment program’s recommendations.
On that same visit to Glacier National Park we drove out along the Camas road, a rarely used, but nicely paved road that leads to a graveled highway and eventually back to civilization. The views along this road were stunning. Perhaps not what you would expect or what we were looking for, but the snow formations amongst the trees, the young tress pushing up over the snow while bare forest fire killed trees stood sentinel were captivating. And of course there were big and small waterfalls and creeks cutting their way to the North Fork of the Flathead River.
The same holds true most any day or week for investing, especially when you are using a stock analysis software program that can ferret out the rising stars like the great hidden views in Glacier.
The critical thing in turbulent or strange market situations revolves around two basics.
First, what is the overlying long-term trend of the markets? Real market trends involve more than days, weeks or even a few months. One certified market technician, Michael Carr, talks about look backs of 250 trading days (that’s a year) and says in his writings that most trends, especially upward trends last for years.
Second, if you are using an investment analysis software program that offers the ability to back test and optimize investment strategies, then stick with strategies that have consistently over the years provided positive results.
Yes, parts of Glacier were dismal that day, but other parts were shining in their own way. And even more important, today the sun is brilliant and the sky so blue; and yes the stock market has been still been bouncing about.
I made some changes in my portfolio over the last month as I followed the recommendations of my software and despite the dip a few weeks ago I have recorded a healthy gain.
Is it easy to stomach losses or watch the Dow Jones drop? Of course not. But when I look at the overall long-term results from my back tested investment software strategies I know than if I don’t follow them I will mess up and be more sad-faced then if I stick with my plan for safe investing, for profitable investing.