Most successful people speak as much about their failures as their successes. As an investor, it is critical to be realistic and acknowledge your situation. Celebrate positives, but don’t deny your shortcomings. Continually strive to improve your behaviors, strategies and processes for investing. As a child, I read over and over “The Emperor’s New Clothes,” the story of a tailor who swindles not just the emperor, but an entire kingdom. The tailor promises the vain emperor a new suit that only will be visible to the smartest and most accomplished people of the kingdom. As the tailor completes the new outfit, the emperor realizes the suit is not visible to him. Not wanting to acknowledge this for fear of looking stupid, the emperor enters the procession down the kingdom to flaunt his new outfit. Finally a small boy cries “but the emperor has no clothes!” and the crowd follows suit to break the silent pretense. The emperor swears to himself that he will never again be vain and to work hard to be better in his position. This Hans Christian Andersen story provides investors with interesting food for thought on many levels. We are our greatest enemy and often the biggest force limiting our own success (although it can be much more fun to blame a bad advisor or congress!). If you would like to be a better investor this year, pick up a copy of “The Emperor’s New Clothes” and look at your investment behavior through lenses of a different color to help your 2012 strategies.
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