The Contrarian Mindset

By Hans Johnson on 10/20/2016

Wealth Builders seem to be natural contrarians at heart that often prefer the road less traveled. They often don't find comfort in the masses. The more popular a belief or idea is the more they tend to avoid it. Social proof tends to be over rated.

If you really want to become a successful investor or business owner it often takes nerves of steel - being willing to go against the grain.

Going with the crowd can get you killed in the markets. There's an old saying, the trend is always right accept in the extremes, when a trade is over crowded its time to get out.

When I look at my own investing experience, the times I've made the biggest mistakes are when I made a decision based on some fear (often fear of loss, or fear of prices going higher).

I've now become very aware of what emotion is driving my (investment) decisions. I ask myself, am I following a methodical, non discretionary system or am I making a decision based on how I feel in the moment? If so, what made me feel this way? Is it something I heard, read, saw recently?

Keeping a journal or log of what you're doing is critical and a priceless investment in your time.

Take note of why you're doing it, what your expected return is, what your exit strategy is (how and when you will get out or sell), how much you should allocate to a particular investment, what types of investments work best for your personal temperament and lifestyle, how the decision fits into your big picture strategy and asset allocation, etc.

Then making sure to record your results, did it turn out how you expected? Did you follow your plan? If so, why? If not, why not?

If you do this simple step I promise you won't regret it.


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P.S. Know someone who could be helped by this information? Consider telling them about the Wealth Builder app or sharing this article via social media. And of course, I am always grateful to hear your feedback and testimonials!