As you’ve no doubt experienced and heard me say a number of times in webinars for some time now, active investing on the ASX, whether with SPA3 Investor or otherwise, was tough from August 2021 to August 2024.
Dave and I covered this in some detail in the last MMM - Portfolio Considerations Webinar on 15th Jan, when we discussed The Discomfort Zones of trading.
However, over the last 6 months since August 2024, trading moved from a Discomfort Zone to a Comfort Zone again. Moving between these 2 zones is an ongoing part of the engaged investors journey, whether active or passive. Ultimately an investor’s outcomes will be far more dependent on how they mentally handle and what actions they take during Discomfort Zones than during Comfort Zones (obviously have to be in the game to get the benefit of the comfort zone periods).
The following chart shows the ASX Public Portfolio (blue line) over the last 6 months from 5th August to 31 January - 23.2%. A clear outperformance so far of 72% the $XJOA of 13.5% (red line) and double the $XJO of 11.5% excl. divs (black line).
When it comes to performance, traders focus way too much on short term underperformance. Stopping most active investors achieve long term outperformance. Kahneman & Tversky tell us that humans get twice the amount of displeasure and discomfort from losing than we do pleasure and comfort from winning.
Of course, our latest training courses (The PROCESS + MINDSET Training Intensive and the Learn To Trade Properly Study Groups) have one of their trading tenets to move towards a neutral mindset.
The purpose of this post is twofold, to:
- bring a little focus on trading comfort zones, and
- ask others, who are comfortable to do so, to post about their pleasurable zones and periods. How has your portfolio performed over the last 6 months?
PS:
If you missed it or would like to watch the 15th Jan Webinar that Dave & I did, you can watch it here:
