http://www.telegraph.co.uk/finance/comment/12103422/Help-for-investors-unfamiliar-with-Zen-like-calmness.html
I particularly love the quotes from the two legendary investors Peter Lynch and Warren Buffett:-
"Peter Lynch, the former Fidelity investment legend, put it well: “Everyone has the brainpower to make money in stocks. Not everyone has the stomach. If you are susceptible to selling everything in a panic, you ought to avoid stocks and mutual funds altogether.”
Warren Buffett was just as forthright: “Unless you can watch your stockholding decline by 50pc without becoming panic-stricken, you should not be in the stock market.” "
I wholeheartedly agree with them, let's face it you'd be daft not too.
I don't normally comment on the gyrations of the main indices or macro conditions and prefer to concentrate my time on stock picking, particularly amongst the micro-caps. In my view, the current market uncertainty is a great opportunity to pick up shares where indiscriminate selling in thin markets is providing opportunities to pick up some bargains.
If I'm honest, despite the obvious wobbles in Asia (particularly China) I'm a little perplexed as to why there appears to be so much doom and gloom. Yes, I'm aware of plummeting oil and resource prices and the implications for oil and resource companies in general, but my simplistic view is that low oil prices coupled with historically low interest rates are generally good for most companies.
Clearly market sentiment isn't helped when Analysts start telling investors to sell everything. Possibly the worst advice I've ever heard. Is it just me, or do you begin to question someone's agenda when they come out with statements like that? It's worth remembering that these so-called financial experts get paid handsomely whether they are correct or not. Frightening really, and an excellent reason to manage your own investments.
Interestingly, it often makes me laugh when I hear traders say, "I'm taking money off the table and I'll start investing again when we reach the bottom of the market". How will they know when that happens? Is this a bear market or just a correction? If you thought a stock was good value a week ago and the news hasn't changed then why would you suddenly think it wasn't good value?
The reality is this. I'd guess some investors sell perfectly good stocks and then sit on their hands waiting for clear signs of a change in market direction that never arrives. Certainly in my investing lifetime, I've never recognised the onset of a bull or bear market phase until it's well advanced, and I've never seen anybody consistently get it right either, and that's with a 50-50 chance of being right or wrong. Most will probably revisit and buy back their shares when the price has already risen above the price they originally sold them for.
This is where I refer back to the Lynch and Buffet comments quoted earlier.
For what it's worth, I'd say the bull market has at least two more years to run before we suffer a significant setback. At least I've got a 50% chance of being right. With a ten year horizon however, I'm very confident that I'm right.
I wholeheartedly agree with them, let's face it you'd be daft not too.
I don't normally comment on the gyrations of the main indices or macro conditions and prefer to concentrate my time on stock picking, particularly amongst the micro-caps. In my view, the current market uncertainty is a great opportunity to pick up shares where indiscriminate selling in thin markets is providing opportunities to pick up some bargains.
If I'm honest, despite the obvious wobbles in Asia (particularly China) I'm a little perplexed as to why there appears to be so much doom and gloom. Yes, I'm aware of plummeting oil and resource prices and the implications for oil and resource companies in general, but my simplistic view is that low oil prices coupled with historically low interest rates are generally good for most companies.
Clearly market sentiment isn't helped when Analysts start telling investors to sell everything. Possibly the worst advice I've ever heard. Is it just me, or do you begin to question someone's agenda when they come out with statements like that? It's worth remembering that these so-called financial experts get paid handsomely whether they are correct or not. Frightening really, and an excellent reason to manage your own investments.
Interestingly, it often makes me laugh when I hear traders say, "I'm taking money off the table and I'll start investing again when we reach the bottom of the market". How will they know when that happens? Is this a bear market or just a correction? If you thought a stock was good value a week ago and the news hasn't changed then why would you suddenly think it wasn't good value?
The reality is this. I'd guess some investors sell perfectly good stocks and then sit on their hands waiting for clear signs of a change in market direction that never arrives. Certainly in my investing lifetime, I've never recognised the onset of a bull or bear market phase until it's well advanced, and I've never seen anybody consistently get it right either, and that's with a 50-50 chance of being right or wrong. Most will probably revisit and buy back their shares when the price has already risen above the price they originally sold them for.
This is where I refer back to the Lynch and Buffet comments quoted earlier.
For what it's worth, I'd say the bull market has at least two more years to run before we suffer a significant setback. At least I've got a 50% chance of being right. With a ten year horizon however, I'm very confident that I'm right.
