Why You Should Have An Abundance Mentality

One of the things I struggle with is having an abundance mentality. I find myself worried about not having enough time or money or clients or whatever…

When it comes to investing, having a mentality that says there is an abundance of opportunity to be a successful investor is paramount.

What on earth am I talking about?

In my experience, many investors see things like Bitcoin or certain tech stocks or gold take off like a rocket. They are left on the sideline while someone else got to ride the wave, and now they feel like they missed their chance. And not only did they miss their chance, they missed their big chance to make money in their portfolio. They feel a mix of guilt and fear and end up jealous.

Here’s the truth: you didn’t miss your one and only chance to make money in the market. The truth about making money in the market is to be globally diversified in big and small stocks in growth and value stocks. You offset that by short-term, high-quality fixed income down to your personal risk tolerance. Then you rebalance regularly back to your target.

You do this over your lifetime and you will be practicing the ways of the successful investor.

When you have the mindset of abundance, you don’t get bogged down with missing out on something. You can celebrate with those who got lucky, and then you can seek the next opportunity. When it comes to investing, as you regularly rebalance, you will find those opportunities over and over as you go.

Maybe an example would help. As the markets fluctuate, let’s pretend that the US market drops and the international market spikes upward. It is now time to rebalance your portfolio back to its target weighting.

Well, the US market now has their stocks on sale (because they went down), and the international stocks are now taking up too much of your portfolio. So, you sell what is high (international) and buy what is low (US) when you rebalance.

What did you just do? You took advantage of the opportunity to buy what is low and sell what is high. This is exactly what everyone knows they should do.

But most people don’t do this. Most people see the US market go down and immediately their brain goes into scarcity mode. They think, “This is bad. I can’t lose money. I should sell before I lose more!” And then, they do.

What did they just do in this example? They sell what is low and lock in their losses.

This scarcity mentality will kill your portfolio.

What is the solution? Having an abundance mentality. Work with a coach who shares an abundance mentality.

Are you investing out of scarcity or abundance? How does your adviser give you guidance?

If you’d like to hear more about how I help my clients invest, please contact me.