By Barrack Yard Advisors People often ask what I think of the market. They want to know if it's going up or down. While it may be fun to speculate, the question is like asking how well the Red Sox will do next season, or who will win the Presidential election in 2016. The answer is anyone's guess. Why do we insist on asking the question when the answer is unknowable? I think it is because asking about the direction of the market is really code for: am I going to be OK?
Is financial peace in the cards for me, or am I doomed to a future of fearfulness and worry? It is about wondering if your investing life will be successful, or not. A successful investing life depends on two variables. The irony is that neither one of them has to do with the stock market's direction in the months ahead, or even in the next several years for that matter. The first variable involves things that can be measured such as your savings rate, the amount of money you already have, and how well that money is managed over time. Most people think this is the tough stuff but it's not. You can always hire someone (like me!) to help. The second variable is much harder because it can't be delegated and it often requires that you act against your instincts. What really counts in investing, and it has nothing to do with numbers, is your own personal behavior. When investor/teacher Benjamin Graham said years ago that "the investor's chief problem—even his worst enemy—is likely to be himself," he was referring to the fact most people are instinctively programmed to be terrible investors. And it has nothing to do with IQ.