Seven seconds is the somewhat popular belief of a goldfish’s memory. Apparently after seven seconds the goldfish has completely forgotten what happened prior. Whether this is true or not, let’s go with it for now.
I would say in some sense, having a goldfish's memory can be an advantage.
However, understand that the media wants you to have a long memory, more akin to the memory of an elephant (assuming you believe that elephants have great memories). They want to fill your head will all the things that went wrong, are currently going wrong, might go wrong, and will go wrong far into the future after we have all passed away (recent news title: the sun will die in approximately 5 billion years and how this will impact us).
It keeps us all hooked to what they are going to say next. And that’s how they make money. Never forget that.
The financial media would like you to believe that it's important to know what happens every day in the markets. They want you to know when the market is down 3% for the day, down 5% for the week, or down 10% for the month.
In this case, be like a goldfish. Give it seven seconds, no more.
I don't know anyone that measures their own personal success in days, weeks or even over the course of a year. For example, college typically takes four years or more for an undergraduate degree and a graduate degree can take several more years after that. We all measure the graduate on their success in graduating after years of studying. Professional success is no different. It takes years to become an expert. I’d like to hear of any professional athlete who mastered their sport in a day, week, month, or even a year. How about a surgeon? How many years before they are considered an expert in their field? Physicist, Contractor, Accountant, you name it, no one masters anything measured in anything smaller than years or decades.
Investing success is no different, it is measured in years and decades, not in days, weeks, or months.
Mastering the markets is more about mastering yourself rather than actually mastering the markets.
How do you master yourself?
By mastering your emotions and your memory.
This is what makes investing so hard.
-Paul R. Rossi, CFA
Paul R. Rossi, CFA