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The process-over-outcome approach from sports psychology applies powerfully to investing and trading—and it's arguably even more critical here because markets are inherently unpredictable and influenced by countless uncontrollable factors (e.g., economic news, geopolitics, or other investors' behavior).The same 2022 meta-analysis (and broader goal-setting research) shows process goals drive the biggest performance gains by focusing on what you control—your analysis, risk management, discipline, and execution—rather than obsessing over P&L or "beating the market." This reduces emotional trading, overtrading, revenge trading, and tilt, which are major reasons most retail traders lose money.Why Process Goals Excel in Investing/Trading
•Outcome goals (e.g., "Make 20% return this year" or "Double my portfolio by 2027") are largely uncontrollable and lead to pressure, impatience, and poor decisions.
•Performance goals (e.g., "Achieve a 1:2 risk-reward ratio on average" or "Keep drawdowns under 10%") are useful milestones but still tie success to results.
•Process goals (e.g., "Follow my trading plan on every setup" or "Review 10 charts daily with my checklist") build consistency and a positive expectancy edge over time. Profits become a byproduct.
Trading psychology experts (e.g., Mark Douglas in Trading in the Zone, and many pros) emphasize this: Focus on executing your process perfectly, and let probability handle the outcomes.Hierarchy for Investing/Trading Goals
1.Big-picture outcome goal (for motivation and direction)
•E.g., "Build a $1M retirement portfolio by age 55" or "Generate consistent passive income from dividends."
2.Performance goals (measurable milestones)
•E.g., "Achieve 8-12% annualized returns with max 15% drawdown" or "Maintain a 55%+ win rate over 100 trades."
3.Process goals (daily/weekly actions you fully control)
These drive the real improvement.
Practical Process Goal ExamplesFor Long-Term Investing (e.g., Buy-and-Hold, Index Funds, Value Investing)
•Daily/Weekly:
•Review my watchlist of 5-10 stocks/ETFs for fundamental updates (e.g., earnings, valuation metrics).
•Spend 30 minutes reading/researching one company or sector deeply.
•Rebalance portfolio quarterly if allocations drift >5%.
•Execution:
•Only buy when a stock meets my predefined criteria (e.g., P/E < industry average, debt/equity <1, dividend growth >5 years).
•Dollar-cost average $X into index funds every paycheck, no matter market conditions.
•Risk/Discipline:
•Never allocate >5% of portfolio to one stock.
•Ignore daily price fluctuations and avoid checking portfolio more than once a week.
For Active Trading (e.g., Day Trading, Swing Trading)
•Daily:
•Scan for setups using my exact criteria (e.g., high-volume gap-ups with clean charts) before market open.
•Limit myself to 3-5 high-probability trades per day (no overtrading).
•Journal every trade immediately after close: what worked, what didn't, adherence to plan.
•Execution:
•Risk no more than 1% of capital per trade.
•Use predefined entry/exit rules (e.g., stop-loss at 2x ATR below entry, target at 1:3 RR).
•Only trade during my optimal window (e.g., first 90 minutes after open).
•Discipline:
•Walk away after 2 consecutive losses or hitting daily loss limit (e.g., -2% of account).
•Backtest/refine strategy weekly based on recent trades.
How to Implement and Improve
1.Define your edge — Write a clear trading/investing plan (strategy, rules, risk parameters).
2.Make goals SMART — Specific, Measurable, Achievable, Relevant, Time-bound (e.g., "Execute my plan on 100% of setups for the next month").
3.Track process adherence — Use a journal or spreadsheet to score yourself daily (e.g., "Did I follow rules? 10/10").
https://t.co/jryCUXAqFV regularly — Weekly/monthly: Analyze process metrics (win rate, RR, adherence) first, then results.
5.Combine with habits — Deliberate practice (backtesting, paper trading), continuous education, and emotional management (e.g., meditation to stay detached).
By prioritizing process goals, you build resilience against market volatility and compounding bad habits. Over time, this leads to better decision-making and—paradoxically—stronger long-term returns. Start with 2-3 process goals this week, track them religiously, and watch how your performance evolves.
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