'Best way to measure investing success is...'
Wealth wisdom of the day: 'The best way to measure your investing success is...' How financial plan and discipline win over outperforming the market When
Wealth wisdom of the day: 'The best way to measure your investing success is...' How financial plan and discipline win over outperforming the market When one thinks of the greatest books ever published on money and value investing, Benjamin Graham’s ‘The Intelligent Investor’ is bound to find a mention. A well-known investor, economist, finance professor, author, Graham is often dubbed as the father of value investing. He is known to have mentored several great minds, one being Warren Buffett, the legendary investor and former Chairman of Berkshire Hathaway.Graham has penned several principles and ideas in 1949 thought-provoking book ‘The Intelligent Investor: The Definitive Book on Value Investing’. The critically acclaimed and revered book is widely considered the bible of value investing, featuring a character called Mr. Market, which Graham used as metaphor for the mechanics of market prices.Some of Benjamin Graham's core investment principles include investing with a margin of safety; anticipating volatility and benefiting from it; knowing what type of investor one is and therefore what type of investing they are good at, among several others.In his very famous book, Graham has argued that the secret to one’s financial success is inside themselves, while also talking about what is possibly the best way to measure one’s investing success.“The best way to measure your investing success is not by whether you're beating the market but by whether you've put in place a financial plan and a behavioural discipline that are likely to get you where you want to go,” the father of value investing is known to have famously said.His words strongly stress on what is a better way of measuring one’s success in investing – it is not whether the individual can outperform the market, but instead a reliable financial plan coupled with behavioral discipline speak louder than returns.While chasing higher returns often feels thrilling and makes you feel like you are winning, following disciple with a proper plan in mind is more likely to yield better returns for you over the long run.In a recent ET Wealth Edition piece, an expert explained the same, suggesting how most investors invest inadequate amounts and justify it with overconfidence in their own abilities to generate above-average returns.Warren Buffett never tried to outperform the market, instead identified and placed strong bets.
He even called the stock market a “voting machine” in the short run, but in the long run, it is a weighing machine, he had said. So, instead of trying to beat it, implementing financial disciple is bound to yield good results.The day someone starts saving or gets regular with their investments, their entire relationship with money starts