"Critical thinking" -- a.k.a. thinking for yourself -- is the pinnacle of a good education.
But even though you realize it's important to think for yourself, as time goes by you find yourself going with the majority. Not rocking the boat is a safer bet. You come to believe you just might live longer.
As you mature and inevitably face decisions like "putting your hard-earned money to work," most of us end up herding in our investment choices, too.
Yet in truth, going with the investment crowd often means financial suicide. You simply end up buying at tops and selling at bottoms -- because the pull of the crowd mentality is the strongest at the markets' pivotal points. (Just think real estate in 2006 and stocks in 2009.) Ironic, isn't it?
If you wish you had timed some of your recent investments differently, consider the Elliott Wave Principle. It is a contrarian method -- critical thinking at its fullest.
Understanding the value of the Elliott wave approach begins by realizing that conventional methods of investing are doomed to fail. Our free Independent Investor eBook is one resource that makes that fact clear. Here's a short excerpt:
Every time there is a recession, observers grumble about economists' methods. The deeper the recession carries, the louder the grumbling. The reason that widespread complaints occur only in recessions is that economic forecasters as a group never, ever anticipate macroeconomic changes. Their tools don't work, but consumers of their commentary do not notice it until recessions occur, because that is the only time when everyone can see that the methods failed. The rest of the time, when expansion is the norm, no one notices or cares.
Ironically, in the long run, the complaints never stick. Once the economy begins expanding again, everyone forgets about their old complaints. The media resume quoting economists, despite their flawed methods, and they are once again satisfied that their commentaries make perfect sense. There is a good reason for this recurring behavior. At the end of this exposition, we will explore why it happens, over and over, and why it probably will never cease.
-- The Independent Investor eBook
This problem likely resonates with you. Just think back to the 2007-2009 crash, when almost everyone agreed that conventional economics had failed. Do you hear anyone grumbling about that now that the stock market has rallied for 2 years? Exactly.
Our free Independent Investor eBook will challenge your conventional notions about investing and explain market behaviors that most people consider "inexplicable."
Packed with insightful analysis from 2010 and 2011 Elliott Wave Theorist and Elliott Wave Financial Forecast issues, this 50-page eBook is free to Club EWI Members.