A benefit of being away from “normal life” is that it allows our minds to think about new ideas and cross link any epiphanies to our existing thoughts. Heck, I even started to read fiction again on our mini-retirement! 🙂
I’ve been grateful and savour the chance to let my mind wander during the long stretches of continuous and seemingly never ending steps on our frequent treks such as those at Machu Picchu, Torres del Paine, and El Chalten, or in the hours spent staring in awe at the majestic views and landscapes.
One such epiphany came about during my hike up to the base of Torres del Paine, Chile.
Usually while hiking, it makes sense to follow in the footsteps of the person ahead of you. Maybe that particular rock has been shown to be safe to step on or sometimes when going through snow the depression of a footstep makes it easier to walk.
So there I was hopping about some rocks on the hike, when it crossed my mind that maybe what I was doing wasn’t so safe to copy. I’m a pretty sure footed hiker and I was going fast because I wanted to ensure I had enough time to catch the shuttle bus back to town. (Things to consider when you don’t engage a guide to save money. Haha.) If someone following what I did didn’t have a decent sense of balance or was carrying lots of weight, then they could fall and injure themselves.
Linking this back to investing, there is a tendency by some investors to copy the trades of famous investors in the belief that you’re coat tailing a much better investor.
While this can sometimes be true, the equivalent to my “hopping on rocks” analogy is that if you do not perform your own analysis and arrive at your own conclusions to enter a particular trade, you won’t have the same understanding of WHY this trade was put in place.
If prices go against you or some bad news comes out, you may not have the conviction to hold and might just panic sell at the worst time.
Writing this out now, it seems like common sense, but I just thought that it was interesting to share this random thought I had while hiking because you never know who it might benefit.
p/s: I also get to show off our amazing photos. Haha!
️Safe investing everyone!
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