Stock market: Four food for thought that can make you a better investor

What's next for the stock market? What are the best stocks? Will the Fed raise interest rates? All of these topics can be discussed and debated, and I really enjoy doing that, as you can see on the “René wants yield” channel on YouTube. But to be honest, these topics aren't really that important. They help you understand the markets better, that's true. And of course it's fun to talk about them with like-minded people. But to be honest, these questions aren't really relevant for a long-term investor. The right attitude is much more important than the twitching of prices. It helped me a lot to get clear about a few things. And I'd like to share these things with you here:

Excess return is not the benchmark

I think it is wrong to measure an investment strategy by whether it achieves an excess return and “beats the market”. Beating the market is difficult and strenuous. If more or less everyone could do it, yesterday's excess return would be tomorrow's new average return. Only with a lot of effort and increased risk is it possible to be better than the others. That can work out well, but it doesn't have to. And why should you take that risk when a boring investment strategy with market returns is enough to achieve your financial goals? I can afford not to be the best investor. What I cannot afford is to be a bad investor.

Don't say crash, say special offer

It's actually a bit crazy: when prices fall in shops, people go bargain hunting. When prices fall on the stock market, they panic. But as a long-term investor, you can actually stay quite relaxed during such phases – or even be happy. Because suddenly everything is much cheaper. The shares are on special offer, if you will. After all, a good company doesn't get worse just because its price falls. “Time is the friend of a good company and the enemy of a bad one,” as Warren Buffett so beautifully said. “When a company is doing well, eventually the stock will follow.”

Since I invest primarily in ETFs, I remind myself during certain phases that the global economy cannot go bankrupt. A crisis is a shock that forces the system to undergo an adjustment process. It changes in order to adapt to the new situation. Some companies or even sectors will not survive this phase. With a global ETF, however, I can be sure that I will only ever be involved in companies that survive this crisis. I also do not have to fear bankruptcies – and can therefore see a crash as an opportunity to buy more shares cheaply.

You don't lose if the other wins more

Everyone probably has a colleague or friend who tells them (unsolicited) about their clever investments. I used to be impressed and jealous and annoyed that I didn't have the courage or the instinct. Now I'm more relaxed about it. I've realized that investing isn't a fight or a competition. It's not about beating others. My financial success doesn't depend on how big the returns are for other investors. After all, I'm not poorer just because someone else's strategy is doing even better than the S&P 500. In the end, it's not important who gets to the finish line first. What matters is getting there at all.

Don’t make money decisions alone

In my experience, there are only a few couples who take care of their finances together. That shouldn't be the case, after all, investing money for retirement affects both of them. One person shouldn't have to bear the last responsibility for making the right decisions. It's also very short-sighted to simply trust that he or she will do it right. If something goes wrong, you'll both be left in a bad mood. Blaming each other is convenient, but it doesn't help. The argument only makes things worse. So make decisions together and stand by them.

And it is also much easier if you regularly talk openly about investments and spending. This is how you can develop a shared vision of money. You express what is important to you and your partner. How do you want to live? What dreams do you want to fulfill? Or, to put it briefly and succinctly: What does your rich life look like? If you answer the question together, everything will follow naturally. Then you know what you like to spend money on, what you want to save and what you are willing to forego. Design replaces arbitrariness.

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