I have a bad idea for you: Investing for entertainment.
Can you can recall a few times in your life when investing became a spectator sport? At every dinner party or function, the conversation would always lead to the next hot investment or how one exceeded market returns. The worst culprit was the media. They still are. They lay down fantastic headlines that make all of us want to open our wallets and throw money at that “hot” investment.
Is that really what investing is all about?
The cause for these “crazy times” may be different, but there are a couple of common themes which ties them together. The first is “get rich quick”. Those who bought this story, especially those who had some knowledge about the ills of market timing and stock picking, also learned the other common theme from “crazy times.” The second theme doesn’t need an intro.
When we next experience “crazy times” and I’m at a dinner party listening to my friends discuss the next “hot” thing, I’m going to jump into the conversation with these questions:
Are you making an investment to reach your financial goals? Or for entertainment?
Are you being realistic, or are you letting your fantasies run away with you?
No question that it’s all entertaining when the markets are making you money. However, losing isn’t fun. Ever.
The next time you’re tempted to “play the market” or tap into a friend’s recommendation… don’t. Head out for dinner or go to the movies instead.