This Is Your Edge Over Wall Street
If there’s one thing my 35 years of investment experience has taught me, it’s this: You have to have an edge.
In the past, the biggest edge that institutional investors had over Main Street Americans was access to information. Information was the key to success until the internet made everything available to virtually everyone.
With this advantage gone, small-time investors actually gained a major leg up over Wall Street.
The question is: What’s your edge?
As an investor, this is mission-critical information. Because if you don’t know what your edge is … you probably don’t have one.
That said, your key to beating the big guys at their own game is…
Big institutions don’t have the luxury of time. Their performance is measured on a weekly, monthly, quarterly and annual basis, and within that timeframe they have to meet their benchmark.
If they’re trading stocks that don’t perform well — outperforming indexes such as the S&P 500 — over certain periods of time … they can lose clients and find themselves in a world of hurt.
We, on the other hand, have time on our hands.
There’s no one looking over our shoulders forcing us to sell our stocks if they underperforming every 13 weeks. Instead, we have the luxury of looking at the performance of companies over the next three to five years.
And that keeps us from making knee-jerk reactions based on quarterly earnings.
Now, don’t get me wrong — I do look at quarterly results. But unlike Wall Street, I look at them in a bigger context. I ask myself what impact the company’s current actions will have on the business in the next five years or so.
If the impact is positive, I’m really happy. If the impact is negative, then I’ll reassess. But I don’t have to jump every time results look lumpy. Unlike professional money managers, we’re able to hold our positions for the long term — making safe, consistent gains from stocks that have no business being sold.
As long as you don’t give up your edge to play for the short term, you will find success that Wall Street can’t beat.
Remember, your edge is time. So use it well.
All my best,
Editor, Alpha Investor Report