Click … bait

You could start by not wasting your time clicking on stupid click-bait articles, I suppose. But since you’re here you might as well learn something.

Investing should be mainly about hard work, slogging through accounts and trying to figure out where or why a company has a defendable competitive advantage. But that’s not much help if you have the self control of an octogenarian with prostate trouble.  Investing is 90% hard work and 10% mental discipline – but don’t even bother if you haven’t got the 10%.

1. Learn Self-Control or Buy Trackers

The research of Walter Mischel revealed that people who demonstrated self-control when small children had, on average, better life outcomes on almost every dimension – in terms of health, relationships, lifespan and investing.The ability to delay gratification, to make a sacrifice now in order to benefit later on, turns out to be one of the key attributes for private investors.

Markets are broadly efficient, at least in the short-term.Day-traders and people making short-term trades are almost guaranteedto lose money unless they have some form of informational advantage. I know a few – a very few – people who do seem to make money in the short-term but they trade in specialized areas where institutions have little interest. For everyone else the main advantage of being a private investor is that we can wait.

Unfortunately, for a lot of people, waiting turns out to be something they’re very bad at. And, as Mischel found, this can be traced back to early childhood. Whether this is a genetic trait or is something learned at the breast isn’t clear, but it’s certainly the case that without it you’re going to struggle to make positive returns. So if you’re the kind of person who can’t wait to buy the latest must-have gadget, and would rather charge to your credit card than wait a month, probably best you stick to index trackers.

See: The Secret to a Healthy, Wealthy Life