This post was written by Tony.
I was recently reading Timothy Ferriss’s book titled “4 Hour Workweek”. Here are is the main thing that we can take away from this book.
You need to make more efficient use of your time, because you only have 24 hours a day. Cut out all the non-core stuff that takes up your time. 80% of the results are done with 20% of the effort.
I’m not going to get into more detail about the book (because I would be spoiling it), but here’s how you can use your time more efficiently to produce better investment returns.
- Don’t subscribe to too many investment newsletters. I know there are tons of appealing newsletters asking you to suscribe, saying “See my secret portfolio that yields 1000% plus annual returns!” In fact, don’t bother subscribing to newsletters that tell you what to invest in. Always do your thinking for yourself. Subscribe to 1 or 2 irregular newsletters that provide a detailed analysis of what’s going on the the financial markets right now. For example, the only newsletter I subscribe to is GMO’s quarterly newsletter. Reading too many newsletters takes a lot of time, and taking too many market opinions into account can clog up your thinking.
- I know some people who love waiting for the latest piece of financial data (e.g. jobs report, unemployment index, this index, that index). Waiting (and getting excited) over upcoming financial data only wastes time. What difference does it make? Reading financial data doesn’t tell you what will happen. The data is about what happened in the past, and has already occured.
- That being said, the only two pieces of news I read is the BusinessInsider Before Opening Bell Summary and After Closing Bell Summary. These two pieces of news give me a good overview of what happened in the day, because that’s all I need. Sticking around on news sites for hours a day hoping to find new information takes way too long.
- Don’t read too many financial blogs and websites. Pick out a few of your favourites, and stick to those. Reading takes time, and information overload is not a good thing.
- To further save time, consider suscribing to the RSS feeds of your favourite blogs/websites. Doing so helps you avoid searching around on that website for the information you need. In other words, you get what you want delivered straight to your inbox.
- Focus on fewer investments. Ever heard of “sometimes less is more?” Do not take every single investment opportunity that presents itself. Wait for the best one to appear, and grab it by the neck. Patience. Sometimes, I’ve waited months with 100% cash, just for the right moment when the markets are ready for some severe profit taking.
- If you really don’t have the time to be a full time, short term investor, then the answer is simple (you probably already know what it is). Be a long term investor. Be a long term investor that sticks to long term market movements. Too many self-proclaimed long term investors end up using short term trading techniques. Stick to what you can do, not what seems seducive.
- Also, avoid watching financial TV. I know Jim Cramer’s show may seem appealing, but financial TV is like seducive sex. 99% of the stuff presented on there is garbage (but still attracts the masses), and the good, useful information can already be found on the internet by the time it’s on TV.
- Avoid the gossip columns. There are forums and comments sections and gossip clubs that encourage their members to discuss their market outlook. Those are mostly a waste of time (unless you can get into Jim Roger’s gossip club), and most people who participate in those clubs don’t know what they’re doing (or at least pretend like they know what they’re doing).