Newsbites

Quotation: John Mauldin

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Chasing the latest investment craze is incredibly easy, as we are bombarded with success stories at every turn – the neighbor who got in on the hot IPO, our brother-in-law with his 30% hedge fund return last year, and the advertising campaigns of the top mutual fund companies, proclaiming their latest star performers (how often does a mutual fund company take out ads listing their best and worst five funds?!). Collectively, these stimuli lure us like a siren’s song to chase the latest winners, be they asset classes, managed portfolios, or individual stocks.

“Hope is not a strategy” – Thoughts from the Frontline Weekly Newsletter dated August 31, 2007.

John Mauldin

Buzz: Financial Gravity – is it holding you back?

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I was reading through GeniusTypes’ recent posting on How the Rich Get Richer and The Poor Get Poorer when I came across a phrase “Financial Gravity” that I had never heard before. He goes on to write about Financial Gravity with these words:

In order to break free from gravity, a rocket must expend a tremendous amount of energy in the initial stages of launch. As it inches away from the earth, the results of its efforts expand exponentially. Less and less effort is needed to travel larger and larger distances.

The principles governing financial gravity are the same. Most people will never escape the forces that keep them struggling. Some people try, but give up before it gets easier. Only those who understand the principles of exponential growth, financial gravity, and persistence will break free into financial orbit.

The whole article is worth reading. But while it is a good read, it will challenge you in your personal or financial beliefs, just as the author was challenged!