Warren Buffett, one of the world’s most successful investors, famously claimed that the most important quality for an investor is temperament, not intellect. To be successful, you need to stay calm and rational during the market’s boom and bust cycles and avoid falling victim to the market’s herd instincts.
Even during dull market days, it takes
Continue reading Have the Right Temperament for Investing
Volatility isn’t bad in itself. It’s your reaction to it that matters most.
Psychological experiments have shown that the stress induced by watching the market heave up and down may lead you to try to lock in your gains by selling your winners, often before you should. The market has always been unpredictable.
There are useful, productive
Continue reading Market Volatility: Your Behavior Decides if it is Good or Bad
Volatility in the markets is often perceived as a risk to investors – keeping them out of the markets altogether and forcing them to store their wealth where they’ll earn a low return in “safe” investments. It’s true that in financial circles the definition of risk is volatility.
If volatility is keeping you out of the
Continue reading Protect Your Wealth by Minimizing, and Not Fearing, Market Volatility
The obvious argument for buying and holding as a strategy to build wealth is that if you try to time the markets it’s virtually impossible that you will sell at the very top or buy back into the market at the very bottom. Blowing this timing can deliver more than a small ding to your
Continue reading Buy and Hold to Build Wealth and Avoid Timing Problem
Over time, riding out the markets’ inevitable ups and downs has proven much more effective than selling into panic or chasing the hottest trend.
Even missing only a few of the markets’ best days can significantly diminish investor returns.
Patience also affords the benefits of compounding – of earning interest on additional income or reinvested dividends and
Continue reading Invest for the Long Term – Staying the Course
Market timing makes more sense with individual stocks. Three out of four stocks move in the same direction as the market. And a stock can dart way above or way below the market average.
Failing to trade in step with the market can be ruinous to those not committed to keeping losses small. A stock can
Continue reading Volatility – Market Timing – Buy and Hold
Money magazine quotes Susan Byrne, founder and chairman and chief investment officer of Westwood Management, who states:
“We make an annual appointment, rebalance, and then I don’t look at my 401(k). I don’t worry about it when it struggles, and leaving it alone and keeping it diversified has helped it grow nicely, even though we’ve
Continue reading Staying the Course – the Phase between Asset Allocation and Rebalancing
A key element of your investment strategy is to “stay the course”. Inherent in this phrase is an assumption that you are on a course and a plea that you not deviate from it. So it is with investing. It’s important that you have a course and that you stay on it.
