The Game of Investing, Vol. 5
- Real Vision
- April 7, 2023
Welcome to The Game
The Game of Investing Newsletter…
…a bi-weekly newsletter where you learn from investing pros about how this game actually works.
Because learning about finance shouldn’t be boring.
This Week…
We’re playing the game within the game.
To win as investors, we must fight a mental and emotional battle with ourselves. Understanding our own psychology helps us make the right decisions for our unique set of goals.
In this issue, we’ll cover 3 things:
- Goals & Motivations
- Trading Style
- The Bigger Picture
To paraphrase Adam Smith, if you don’t know who you are, the market is an expensive place to find out.
(Speaking of which, stay tuned for an important new series dropping next week on Real Vision. It’s a must-watch if you’re planning your future).
Now, let’s dig in.
LEVEL 1 — The What
What are you trying to accomplish?
All of us play the investing game to achieve our financial goals.
- Maybe you have a particular target
- Maybe you want to achieve maximum wealth
- Maybe you want to earn an income
What are your constraints?
- Is your time frame flexible?
- What are you willing to do — and not do — and why?
- What amount of risk would make you lose sleep?
- How will you make decisions when your risk level is breached?
Pro tip: Take the dollar amount that would make you lose sleep and multiply it by 0.75… That’s your wellness limit.
✍️ Your Homework: Write down your motivation for investing as well as your last trade or investment. Do the two match?
Level 2 — The Style
The next step is finding a trading style.
Playing to your strengths — and recognizing your weaknesses — is important.
- For example, someone who struggles with impulse control is likely better suited for a long-term approach rather than swing trading.
There are endless trading strategies, but most are subcategories of these types:
- Fundamental analysis: Fundamental investors focus on the long-term potential of businesses and their valuations.
- Technical analysis: Technical traders forecast the direction of price based on statistical trends in price and volume.
- Macro analysis: Macro investors analyze large-scale economic patterns such as interest rate trends, international relations, and global liquidity.
Figuring out which of these fits your personality will allow you to drill down on the specific strategies.
Level 3 — The Bigger Picture
As investors, we react to endless streams of data. Things like fitness, sleep patterns, and mental health all play a role in how we process stress and make decisions.
- The more stressed you are, the worse your performance becomes.
- Physical and mental wellness is key to operating from a place of stability and security.
Here’s a FREE episode where Real Vision’s Maggie Lake interviews world-renowned performance coach Denise Shull about how investors can optimize their mental and emotional wellness.
✍️ Your Homework: Do some cardio, enjoy a nice meal, or give an old friend a call — basically, whatever works to clear your mind and take a break from the screens.
🔑 If you’re ready to take your investing education further, you can now access The Real Investing Course — part of the Real Vision Academy — without committing to an annual membership… and at 40% off.
This course gives you the tools to become a better investor in the real world, with thousands of hours of insight delivered in less than 10 — from trading legends like Peter Brandt, Lyn Alden, Mike Green, Raoul Pal, and many more.
The Game of Investing Newsletter…
…a bi-weekly newsletter where you learn from investing pros about how this game actually works.
Because learning about finance shouldn’t be boring.