Missing Out on Growth

survivorship

 

When you see headlines like, “Nvidia becomes world’s most valuable company…” 1

Or read that a few stocks are responsible for most of the market’s gains…

Or see some newsletter bragging about a X,XXX% return on a single stock pick…

It’s natural to wish you could go back in time, invest in a “sure thing,” and ride the escalator all the way to the bank.

But that just isn’t how investing works.

(By the way, Nvidia experienced the fastest loss in history pretty quickly after reaching the top spot. 2)

There are two hard truths I want you to remember when you get that FOMO (fear of missing out) feeling:
  1. There’s no such thing as a sure thing. No one predicted the AI boom that rocketed tech stocks to the stars in 2024.
  2. High-flying stocks are very vulnerable to sudden crashes that also hit without warning.

You probably already know all that.

It’s easy to let headlines overwhelm logic.

Everyone loves a winner, but no one is good at consistently picking them (or predicting the moment when winners turn into losers).

Sure, some folks like to gamble big to win big.

More often than not, gamblers lose big.

(The headlines skip that part, and the losers usually slink off to a corner instead of showing up on the news.)

Economists call that “survivorship bias.”
 
 
It’s when we forget that for every winner, there are many losers.

When we draw conclusions from the select few who win big while ignoring the failures, we’re likely to make mistakes.

And picking a winner while skipping the losers is all luck.

How do we give ourselves the best chance to invest in market winners?

I’ve got bad news for you: it’s boring and doesn’t make for great headlines.

We pick a strategy and stick to it.

We diversify.

We check in and adjust based on what we see.

Rinse and repeat.

There’s no magic to long-term returns.

Just patience and consistency.

If you’re ever feeling frustrated that you missed a sure thing or that your portfolio isn’t keeping up with the headlines, please reach out and let me know.

I’ll show you the hidden stuff the headlines conveniently leave out.

Patiently,

Barry

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“The most important quality for an investor is temperament, not intellect. You need a temperament that neither derives great pleasure from being with the crowd or against the crowd.”
 
— Warren Buffett
 
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