Philosophy of Great Investors
“Individuals who cannot master their emotions are ill-suited to profit from the investment process.”
Benjamin Graham. Father of Value Investing
Avoid Self-Destructive Investor Behavior
Chasing the hot-performing investment category or making major tweaks to your long-term investment plan can sabotage your ability to build wealth. Instead, work closely with your financial advisor to outline your long-term goals, develop a plan to achieve them and set the expectation that you will stick with that plan when faced with difficult periods for the market.
“History provides a crucial insight regarding market crises: They are inevitable, painful, and ultimately surmountable.”
Shelby M.C. Davis. Legendary Investor
Understand That Crises Are Inevitable
Crises are painful and difficult, but they are also an inevitable part of any long-term investor’s journey. Investors who bear this in mind may be less likely to react emotionally, more likely to stay the course, and be better positioned to benefit from the long-term growth potential of stocks.
“Despite inevitable periods of uncertainty, stocks have rewarded patient, long-term investors.”
Christopher C. Davis. Portfolio Manager, Davis Advisors
Understand While Painful, Crisis Creates Opportunity
Low prices can increase future returns. Investors who bear this in mind are more likely to endure hard times and be there to benefit from the subsequent periods of recovery.
“Far more money has been lost by investors preparing for corrections or trying to anticipate corrections than has been lost in the corrections themselves.”
Peter Lynch. Legendary Investor and Author
Don’t Attempt to Time the Market
Investors who understand that timing the market is a loser’s game will be less prone to reacting to short-term extremes in the market and more likely to adhere to their long-term investment plan.