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The evolution of the markets can be channelled and summarized as the result of the decisions of a group of people. Therefore, the movements that occur in the stock markets come as a response to the decisions made by these people. People with emotions react when they are afraid or euphoric if they win or lose with their investments.

Is it necessary, and even vital, to eliminate psychology when investing?

From our point of view, YES. In the short term, it is a game of chance, where it is possible to win or lose. But when you see how complicated it is to beat the indices and above all that Blindfolded Monkey Beats Humans With Stock Picks, you realize that you either leave your money in an index fund or try to make statistics work in your favour.

To this end, we have identified 4 key components that every investor must know how to control if he or she wants to have a successful investment future:

Self-control

Personal self-control allows you to control external situations more effectively and accurately. A person who does not control himself is a recipe for disaster. All the more so when it comes to the financial markets, where mistakes are costly. Personal self-control is a gradual skill that is achieved through proper habits.

Today many people fall into unhealthy habits (excessive sugar consumption, perpetual procrastination, endless hours of TV) that prevent them from developing their skills and dull their minds.

“You have power over your mind - not outside events. Realize this, and you will find strength.” ― Marcus Aurelius, Meditations

Achieving greater self-control involves having positive habits:

✔️Positive mental dialogue.
✔️Develop routines that allow you to develop mental muscle in the form of patience and discipline.
✔️Think about the consequences of something before executing it.

Patience

With patience, we see opportunities better; we gain a better perspective. Patience often allows us not to make more mistakes than we have already made.

Resilience

Resilience is an effective tool for our uncertain times. It helps us learn to live with the basic complexity of modern life.

The goal of resilient investing is to provide a strong-yet-flexible foundation for short, medium, and long-term decision-making; in the face of an uncertain future, we want to make things better for ourselves and the world. We are using resiliency in its most flexible and optimistic form, still loyal to the goals of sustainability (providing for the needs of the present without harming the future) and with eyes staying sharp for emerging prospects.

Recovering positively usually comes from a combination:

✔️Positive mindset.
✔️Certainty of being able to achieve a better outcome.
✔️Surrounding yourself with possibilities and people who inspire you.
✔️A personal introspection to rethink criteria to be able to do certain things better.

Self-confidence

Self-confidence is usually the product of possessing an ability or certain mastery in a specific area. This provides the variable certainty, a product of knowing what we do and recognizing where we are. By having certainty, we have the ability to move more fluidly, which allows us to be more effective.

As we said, self-confidence allows a person’s capabilities to flourish and become more effective. If we want to achieve more self-confidence, the path that has proven to be able to develop is:

✔️Training.
✔️Continuous practice.

Following this philosophy is precisely what we seek with our portfolio; we firmly believe that we are in a market situation in which central bank policies are not being adequate and that sooner or later it will explode, which means that it is worth being protected despite seeing how day after day the markets record highs.