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Strategy Two Arrows

Your Advantage
by WealthEffect Staff


You can't beat Wall Street at its game
  Don't be seduced by information overload  
  Your strategy is your advantage  

Wall Street is an impressive place — to many it seems almost a secret society playing with built-in advantages. How then, do you beat them at their game?

The short answer is that you can't. The better answer is that you don't have to. The investment community is obsessed with short-term results. Professional investors are trying to outperform the market in the next three or six or twelve months. If you try to beat them at this game, you will lose — they have more training, they have better information, they can react more quickly, and they sit by their phones and machines from morning till night.


This is not to say that you don't have access to reams of information. Television channels are devoted to reporting every wiggle and analyzing every waggle. Brokers and financial planners will willingly overwhelm you with asset-allocation printouts and any number of opportunities within those asset classes. The Internet can provide you with real-time quotes and on-line news, even SEC filings. It's a dream come true.

But as the saying goes, be careful of what you want because you just might get it. This explosion of information has made your task harder, not easier. There are so many sources, so many obvious opportunities (in retrospect, this is), so many seductive suggestions, it's mind-boggling.


Where, then, is your advantage? If you can't beat Wall Street at its game and if the information overload is more likely to leave you brain dead than brilliant, how then do you win?

You win by leaving the speculating to others. You win by focusing on long-term predictability while others obsess on short-term volatility. You win by identifying great companies and growing with them over the decades. You win by being an investor. This is your advantage.

It is almost illogical to think that you can beat so many bright and motivated people in such an important contest. Yet, when you realize that they're playing with the wrong rulebook, it's not so inconceivable after all.

Suggestion: Go to Tactics