âEconomists will know tomorrow why the things they predicted yesterday didnât happenâ is a joke that, in this fast-moving market cycle, has a deeper lesson. Rather than sticking to an all-knowing prediction, itâs more fruitful to use a transparent cause-effect framework to recalibrate the base case as events unfold.
Peaks and Valleys By Spencer Johnson, which I highly recommend reading, is a motivational story of a young man who lives in the valleys uneasily until he meets an old man who lives on a peak and changes his work and life forever.
Initially, the young man does not realize he is talking with one the most peaceful and successful people in the world. However, through a series of conversations and experiences that occur up on peaks and down in valleys, the young man comes to make some startling discoveries. Eventually, he comes to understand how he can use the old man's remarkable principles and practical tools in good and bad times and becomes more calm and successful himself.
how to have more Peaks and fewer Valleys in our future.
Peaks And Valleys Are Connected in Two Ways:
The Errors You Make In Todayâs Good Times Create Tomorrowâs Bad Times.
And The Wise Things You Do In Todayâs Bad Times Create Tomorrowâs Good Times.
So Traders and investors can now take a similar journey in the story and use what you find to their advantage in business and even in life.
Few key Learning From the Book for traders; Hereâs how to get out of a Valley sooner, how to stay on a Peak longer,
Imagine the peaks, as when Your portfolio has grown dramatically , And the valleys as when the market has fallen and you are bankrupt and feel like doomed.
1. What helps in coming out of Valleys (Low times) â
This line sums up the solution well â To change Valley times into peak time we need to know what brought us to the valley, and which of our habits were keeping on Peak. We may not control outside circumstances all the time however, we can always control how we respond to current situation and how we act.
2. Nothing fails like Success â
After returning from Peak, the young man applies what he learns from Old man and sees success in all areas of life. Though within some time everything starts to fall apart for he doesnât manage his success well.
Lesson â As we get success, we should always take out time to appreciate, rest and reflect on what we have achieved so far, what got us there? Keep in mind that there will be always valleys following peaks and we need to be prepared accordingly. We only get better with every valley we pass through.
3. I can have more good times than bad times.
Why does being in a Valley have to be so painful? The Pain In A Valley Can Wake You Up To A Truth You Have Been Ignoring.
We can have fewer bad times when we appreciate and manage good times wisely.
We shouldnât mistake arrogance for confidence in good times, and fear for comfort in bad times.
Having and drawing sensible vision for future is another great way of getting out valleys faster and staying on peak longer.
We must avoid believing things are better than they are while on peak, and worse than they really are when in valley.
. Studies by Morningstar and other independent researchers have shown that individual investorsâ average returns over time have tended to lag those of the mutual funds in which they have invested. The reason: the tendency of many investors to move in and out of funds, too often at the wrong times, with negative consequences. âMost investors would agree that itâs most desirable to buy low and sell high,â says Judith Ward, a T. Rowe Price financial planner. âThis may sound simple, but it isnât easy for investors to achieve that timing as markets rise and fall.â This yearâwith the sharp fall in global markets and I don't expect a sudden reversing course into a steep recovery in the current worldwide recession â
this is not the only and the latest period when many equity investors may have found their long-term investment plans challenged by their emotions. let have a flash back to stock market situation in 2009 âGiven the turmoil at the beginning of 2009, many investors doubtless were tempted to change their investment strategies by reducing their exposure to stocks and stock funds,. but best advice: Determine your investment goals and an appropriate long-term investing strategy to reach those goals. And then resist the temptations to deviate from that long-term plan. Finally, review the plan regularly but not so often that you are frequently tinkering with itâlet alone attempting to time your stock market investments.
. To underscore this point, compare two hypothetical investors who each want to set aside a part of their income monthly . from the end of 2017 to Over the next years, each investor buy $100 a month to his account. The only difference between the two was that after March 2020âwhen bitcoin had fallen more than 50% over the past monthsâthe second investor capitulated, moving all of his portfolio to cash and investing all subsequent additions into cash. Meanwhile, the first investor continued adding $100 a month to portfolio monthly as the market rose until now, Both investors had balances of more than $2800 by Mar-20 .At that moment the second investor looked like he had made a good move by bailing out of the market. But meanwhile disciplined investor who had continued purchasing then saw the market began its rally .
But then the market recovery took off, the investor who had stayed the course with was ahead againâa lead that would widen as the year went on. you see even this more disciplined investor still had less in his account for a while in mar-20 than the regular saving . ($2,833.75 investors balance<==> $3000 regular saving) . Of course, given the scale of the historic market downturn during this period, even this more disciplined investor still had plus in 2022, his account totaled almost $13,200 more at end rather than the investor who had fled to cash in early 2020. â
Although the truth is that âRegular contributions cannot assure a profit or protect against loss in a declining market,â âBut over the long haul, it can help you weather market storms, build a solid foundation for your investment goals, and take advantage of downturns to buy at lower prices.â
DATA SHEET:
date -------------------- open-------- high-------- low-------- close-------- avg high and low --------month-------- investor 1-------- investor2-------regular saving
1-Oct-17-------- $5,712.00--------6384.91--------5400--------6339.65--------5892.455 -------- #1---------------$100 -------- $100- ---- -------$100
|......
1-Mar-20--------$8,650.64--------9187.7--------3800--------6453.05--------6493.85 --------# 30--------------$2,833.75--------$2,833.75----------- $3,000
|...
1-May-22-------- $38,468.34--------40029--------26656--------29620--------33343.19 --------#56------------- $18,539.70 -------- $5,433.75 -----------$5,600
Conclusion :
So in a metaphor, I likened peaks and valleys to similar situations, both market ups and downs and trading accounts.
I think we can be well inspired by reading this book.
as we know Market conditions are always changing. So to be a part of 10% successful trader ,Having mental and emotional mastery is vital, what helps us is that when our balance grows so high, we should not be in a frenzy, nor should we be overwhelmed by fear, despair, and severe depression during a recession.
It is better to have a long-term view of the market and investment. To get through these inevitable steps sooner!
quintet.com-The Peaks & Valleys by Spencer Johnson
Peaks and Valleys By Spencer Johnson, which I highly recommend reading, is a motivational story of a young man who lives in the valleys uneasily until he meets an old man who lives on a peak and changes his work and life forever.
Initially, the young man does not realize he is talking with one the most peaceful and successful people in the world. However, through a series of conversations and experiences that occur up on peaks and down in valleys, the young man comes to make some startling discoveries. Eventually, he comes to understand how he can use the old man's remarkable principles and practical tools in good and bad times and becomes more calm and successful himself.
how to have more Peaks and fewer Valleys in our future.
Peaks And Valleys Are Connected in Two Ways:
The Errors You Make In Todayâs Good Times Create Tomorrowâs Bad Times.
And The Wise Things You Do In Todayâs Bad Times Create Tomorrowâs Good Times.
So Traders and investors can now take a similar journey in the story and use what you find to their advantage in business and even in life.
Few key Learning From the Book for traders; Hereâs how to get out of a Valley sooner, how to stay on a Peak longer,
Imagine the peaks, as when Your portfolio has grown dramatically , And the valleys as when the market has fallen and you are bankrupt and feel like doomed.
1. What helps in coming out of Valleys (Low times) â
This line sums up the solution well â To change Valley times into peak time we need to know what brought us to the valley, and which of our habits were keeping on Peak. We may not control outside circumstances all the time however, we can always control how we respond to current situation and how we act.
2. Nothing fails like Success â
After returning from Peak, the young man applies what he learns from Old man and sees success in all areas of life. Though within some time everything starts to fall apart for he doesnât manage his success well.
Lesson â As we get success, we should always take out time to appreciate, rest and reflect on what we have achieved so far, what got us there? Keep in mind that there will be always valleys following peaks and we need to be prepared accordingly. We only get better with every valley we pass through.
3. I can have more good times than bad times.
Why does being in a Valley have to be so painful? The Pain In A Valley Can Wake You Up To A Truth You Have Been Ignoring.
We can have fewer bad times when we appreciate and manage good times wisely.
We shouldnât mistake arrogance for confidence in good times, and fear for comfort in bad times.
Having and drawing sensible vision for future is another great way of getting out valleys faster and staying on peak longer.
We must avoid believing things are better than they are while on peak, and worse than they really are when in valley.
. Studies by Morningstar and other independent researchers have shown that individual investorsâ average returns over time have tended to lag those of the mutual funds in which they have invested. The reason: the tendency of many investors to move in and out of funds, too often at the wrong times, with negative consequences. âMost investors would agree that itâs most desirable to buy low and sell high,â says Judith Ward, a T. Rowe Price financial planner. âThis may sound simple, but it isnât easy for investors to achieve that timing as markets rise and fall.â This yearâwith the sharp fall in global markets and I don't expect a sudden reversing course into a steep recovery in the current worldwide recession â
this is not the only and the latest period when many equity investors may have found their long-term investment plans challenged by their emotions. let have a flash back to stock market situation in 2009 âGiven the turmoil at the beginning of 2009, many investors doubtless were tempted to change their investment strategies by reducing their exposure to stocks and stock funds,. but best advice: Determine your investment goals and an appropriate long-term investing strategy to reach those goals. And then resist the temptations to deviate from that long-term plan. Finally, review the plan regularly but not so often that you are frequently tinkering with itâlet alone attempting to time your stock market investments.
. To underscore this point, compare two hypothetical investors who each want to set aside a part of their income monthly . from the end of 2017 to Over the next years, each investor buy $100 a month to his account. The only difference between the two was that after March 2020âwhen bitcoin had fallen more than 50% over the past monthsâthe second investor capitulated, moving all of his portfolio to cash and investing all subsequent additions into cash. Meanwhile, the first investor continued adding $100 a month to portfolio monthly as the market rose until now, Both investors had balances of more than $2800 by Mar-20 .At that moment the second investor looked like he had made a good move by bailing out of the market. But meanwhile disciplined investor who had continued purchasing then saw the market began its rally .
But then the market recovery took off, the investor who had stayed the course with was ahead againâa lead that would widen as the year went on. you see even this more disciplined investor still had less in his account for a while in mar-20 than the regular saving . ($2,833.75 investors balance<==> $3000 regular saving) . Of course, given the scale of the historic market downturn during this period, even this more disciplined investor still had plus in 2022, his account totaled almost $13,200 more at end rather than the investor who had fled to cash in early 2020. â
Although the truth is that âRegular contributions cannot assure a profit or protect against loss in a declining market,â âBut over the long haul, it can help you weather market storms, build a solid foundation for your investment goals, and take advantage of downturns to buy at lower prices.â
DATA SHEET:
date -------------------- open-------- high-------- low-------- close-------- avg high and low --------month-------- investor 1-------- investor2-------regular saving
1-Oct-17-------- $5,712.00--------6384.91--------5400--------6339.65--------5892.455 -------- #1---------------$100 -------- $100- ---- -------$100
|......
1-Mar-20--------$8,650.64--------9187.7--------3800--------6453.05--------6493.85 --------# 30--------------$2,833.75--------$2,833.75----------- $3,000
|...
1-May-22-------- $38,468.34--------40029--------26656--------29620--------33343.19 --------#56------------- $18,539.70 -------- $5,433.75 -----------$5,600
Conclusion :
So in a metaphor, I likened peaks and valleys to similar situations, both market ups and downs and trading accounts.
I think we can be well inspired by reading this book.
as we know Market conditions are always changing. So to be a part of 10% successful trader ,Having mental and emotional mastery is vital, what helps us is that when our balance grows so high, we should not be in a frenzy, nor should we be overwhelmed by fear, despair, and severe depression during a recession.
It is better to have a long-term view of the market and investment. To get through these inevitable steps sooner!
quintet.com-The Peaks & Valleys by Spencer Johnson
