Anyone who has been around our community
has
heard us talk about the value of having a
long term
vision for your ideal life. As people, we
need to be
drawn towards what we desire as opposed to
running
away from what we don't. We need to put the
Law of
Attraction to work for us, and to do this we
need to focus
on what we want rather than what we don't
want.
A large, long term vision also has the
power to keep
us moving forward through the inevitable
obstacles
that appear in our way. Imagine traveling
across a
plain strewn with massive boulders: if what you
are
heading for isn't bigger than the boulders in
front of
you, you will quickly give up because the goal
is no
longer in sight. Imagine, however, that your
destination is a mountain instead of a hillock:
how
much easier is it to keep heading in the right
direction? It all comes down to having a
powerful,
long term vision, and then working out what
you need
to do to get there.
The same thing applies when it comes to
investing.
From 1977 to 1990 Peter Lynch, arguably one
of the
greatest investors of all time, increased the
value of
the mutual fund he was in charge of (the
Fidelity
Magellan Fund) from $20 Million to $14 Billion,
recording an average 29% annual growth, and
providing one of the most lucrative investment
vehicles of the century. Yet, when he looked
back at
his numbers, he saw the most disturbing and
peculiar
thing: the majority of investors in his fund
actually lost
money.
How is this possible? For people that rode this
wave,
the value of their money was doubling every 2
½
years: investors should have been
ecstatic,
and yet
most people who bought Fidelity stock lost
money on
the deal. Why? Because, as Lynch found
out,
people
would jump in and buy after good quarters -
when
the stock price was up a bit - and then sell
when the
quarterly reports did not look so rosy.
They
were, in
actuality, buying high and selling low,
something that
any high school student could tell you was a
bad
idea.
So what were the motivating factors behind
that type of
panic buying and selling? Fear AND the
lack of
long
term vision. People would look at the
short
term results
and either get excited and buy, or get scared
and sell.
This type of approach to anything, let alone
investing,
will crush you. As Lynch himself says:
"Stocks are relatively predictable over twenty
years. As
to whether they're going to be higher or lower
in two to
three years, you might as well flip a coin to
decide."
The same comment might well be made about
our
artistic careers, or our job prospects: we
might be up
some years, and down others, but as long as
we
have the right mentality - and by that I mean
long
term thinking - we will see steady
progress. It drives
me nuts when I hear people say "I'm going to
give
this acting thing a try for a few months, see
how it
works out". It takes years to build an acting
career,
not months. The artist who actually plans to
succeed
would never stop painting because they didn't
sell a
piece, nor quit writing because of a script
rejection.
What keeps us going through these situations
is our
long term vision of our artistic goals: the same
thing
will keep us going towards our financial goals
as
well.
