Investing tip: The 3 investing edges you can develop as an investor
There are 3 advantages that give us an edge in investing. The first two are difficult for retail investors to develop:
- Informational edge: Getting information unavailable to others.
- Analytical edge: Analyzing information and data to find insights others can’t.
But the last one can be developed by anyone — behavioral edge — beating the market by having discipline in the investment process.
- Dennis Lynch of Counterpoint Global, who manages over $100b in assets, tries to beat the market with patience and long-term holding periods.
- Lynch calls this his ‘patience temperament edge’ — sticking with positions full-on knowing there’ll be ups and downs.
Like most of us, Lynch won’t know how the market will react in the short term. So instead of focusing on the short-term quarterly earnings, he’ll look at the forecasted earnings for the next 3-5 years.
He thinks deeply about qualitative factors, like the existing competitive advantages within companies.
See his full interview on the Invest Like the Best podcast.