by Doug Goldstein CFP® | Aug 15, 2017 | Decision Making |
Some people treat market trends like any other kind of fashion. Just as many people dress in a certain style because it’s popular, some investors choose a particular type of investment or react in a particular way to the markets because “everybody’s doing it.” But is that wise? Don’t follow the crowd Imagine taking this approach when playing a game of chess. Instead of thinking whether your strategy is of any real benefit to your particular situation and if it’s actually helping you win, you blindly follow a specific approach simply because you read about it on a couple of chess blogs. Without questioning it, how do you know if it’s a good strategy for you? In fact, when Susan Polgar and I wrote Rich As A King, she said a common problem she sees with amateur players is that they often memorize openings of world champions, but then get stuck because they don’t really know what to do once the board develops into the mid-game. While a particular strategy may be popular because it really is effective, that doesn’t automatically mean that it’s right for you every time. You need to look at what’s happening on the chessboard, what your opponent is doing, and then determine which strategy can help you win in your specific situation. Blindly following a strategy just because it sometimes works or because it worked for someone else, without stopping to think about its actual effectiveness in your particular situation, can be a huge mistake. As Ralph Charell wrote, “Avoid the crowd. Do your own thinking independently. Be the chess player, not the chess... Click for more
by Douglas Goldstein | Jul 25, 2017 | Decision Making, Podcasts |
When looking to invest in great mutual funds or make any other investment decisions, understand what “survivorship bias” and “creation bias” are and how these can become potential pitfalls. Biased decision-making can also affect the world of chess. Listen to learn what biases you should look out for both in investing and on the chessboard. For more about investing in mutual funds, read... Click for more
by Douglas Goldstein | May 16, 2017 | Decision Making, Podcasts, Strategic Thinking |
When playing chess and investing, it’s a good idea to measure your results by looking at performance metrics. But why are metrics important? Find out how measuring performance improves efficiency. If you can measure it, you can improve it! This financial podcast also discusses literacy and its connection with improved living standards in many parts of the... Click for more
by Douglas Goldstein | May 2, 2017 | Decision Making, Financial Plan, Podcasts |
One of the reasons investing in the stock market is so difficult is because we can’t predict the future. The trick is to use hindsight to help you determine what will be. While past performance is never a guarantee of future results, if you were able to invest in the stock market 50 years ago, would it have been a worthwhile investment? Take a look at how the world’s economy and standard of living have developed over the past 50 years. When deciding where and how to invest, it’s important to look at the market’s potential and not only at its past. Looking at the potential of every country’s economy is just like how a chess player examines the potential of every... Click for more
by Doug Goldstein CFP® | Apr 13, 2017 | Chess Strategies, Decision Making, Inspirational Quotes |
What makes a player win in chess? Is there a special, secret formula that always guarantees victory? As chess is a multifaceted game, there’s no one uniform tactic or strategy that works for every single player all the time. Every player has his or her own unique style of play. What works for one player may not work as well for another. However, despite their differences, people who win in chess have one thing in common. What is it? The secret ingredient to make you win Grandmaster Aaron Nimzowitsch said, “Many men, many styles. What is chess style, but the intangible expression of the will to win?” In other words, it’s not enough to memorize dozens of possible chess moves. You need to have the will and determination to win the game. Chances are that in any single game you lose several valuable pieces along the way, and you’ll have to change strategies mid-game. But if you‘re determined and believe you can win, you won’t give up, and will play the game to its end. The will to win also helps you succeed in finance The financial world is similar to the chessboard. While it’s obviously harder to get on your feet after sustaining a financial loss than it is to restart a failed game of chess, you still need the will to win to become a successful investor. The market may have its ups and downs, but don’t give up. If you are determined to “win,” (read: prepare for a financially successful life) you need to keep reassessing your investing strategies and tactics as you go along. As... Click for more
by Doug Goldstein CFP® | Feb 28, 2017 | Chess, Decision Making |
The way you play chess can shed light on how you manage your money. If you are a careful chess player and keep track of your moves, you might find a budgeting tracker a useful tool. In chess, you have a set number of pieces. In order to win, you need to use each piece in the most efficient way that you can. Rather than randomly moving around the board, you need to plan your moves based on the pieces you have available and where they are in relation to your opponent’s pieces. Similarly, when it comes to your monthly budget, you need to look at each dollar you have and use it most efficiently. If you don’t use what you have wisely, you may be left short before you get your next paycheck. If you don’t follow a budget, you won’t know where your money goes. This is why a budget tracker is extremely helpful. It allows you to become organized and methodical with your spending. The best budget trackers help you monitor your expenses, categorize them, and break them down so that you can plan better where to spend your money. Don’t let budgeting intimidate you Sometimes people feel overwhelmed when they first start tracking their expenses. Watching the list of categories where you spend money grow as you go through the month can be quite intimidating. Don’t let this scare you. Once you know exactly where your money is going, you will have a better idea of what you could cut. Budgeting is one of the most efficient ways to make the best use of your... Click for more
