Today, I’m going to teach you one of the hardest lessons for investors to learn…
It’s worth it to try, though. That most investors will never learn this concept gives those of us who do a huge advantage now and forever.
It may come as a shock, though… You may find it very hard to believe… But it’s key to the success of some of the world’s most successful investors…
Gross domestic product (GDP) growth and stock market returns have just about nothing to do with one another. In fact, you can achieve great investment results without ever thinking about another “macro” issue again.
Most people base their investing decisions on economic data, forecasts, and what they hear in the media. They obsess over unemployment numbers… the Producer Price Index… housing numbers… interest rates… factory orders… industrial capacity utilization… the Baltic Freight rate…
But the wisest, richest investors in the world say to forget it.
Business partners and billionaire investors Warren Buffett and Charlie Munger, for example, have been investing their own and other people’s money for 47 years. And in all that time, they claim they’ve never had a single conversation about the economy. They simply don’t waste time on it.
The vice chairman of investment firm Fidelity, Peter Lynch, is one of America’s top money managers. He says if you spend 13 minutes thinking about economic and market forecasts, you’ve wasted 10 minutes. It’s just not worth thinking about.
Ben Inker of the money-management firm Grantham, Mayo, and Van Otterloo recently wrote
Great businesses aren’t cyclical. They don’t get better or worse with the economy. They stay profitable and continue to gush free cash flow and pay higher dividends every year.
If you focus on buying great businesses, you can turn down the volume on cable news’ fretting about Europe’s debt, Obamacare, and the Fed’s latest pronouncement.
You probably don’t believe it… I get reader feedback indicating many folks refuse to stop obsessing about economic and political problems. They just don’t get it.
What’s a fella to do? It’s my job to show you the way, to help you become a better investor. But lots of folks don’t seem to want to hear it. Instead, they let the market guide their investing decisions time and time again… And they miss out on some great investing opportunities.
I’m not saying you should never read another newspaper. By all means, know what’s happening in the world. Understand the backdrop in which you’re investing. But don’t waste a minute trying to figure out what stock to buy based on economic reports and forecasts.
Don’t let macro fears prevent you from buying great businesses and compounding your wealth with great stocks.
Good investing,
Dan Ferris
Further Reading:
Some of the world’s greatest businesses are also the most “boring.” But they are the ultimate safe-haven in today’s volatile market. “If you want excitement, go to Las Vegas,” Dan says. “If you want to make money, invest in boring businesses that dominate their industries and pay higher dividends every single year.” Learn more here.
Dan recently tipped readers off to one phone call every investor should make. “I’m not talking about the numbers you see on late-night infomercials for ‘get rich quick’ investment strategies,” he writes. “In five minutes, you can put one of the universe’s most powerful forces to work for you. You just need to dial that number.” Get the full story here: The One Phone Number Every Investor Needs to Know.
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