I wanted to highlight today some quotes from some very smart individuals that have weathered some tough market conditions and are now weathering or would be if alive the current market conditions.
With all things financial, behavior is a key factor that separates successful investors and unsuccessful investors. Now, I don't mean that you can pick better stocks and I am not talking about the popular topic of Behavioral Finance which is a completely different and irrelevant thing. Behaving well for the individual investor is having a well thought through game plan which involves a professional that is seasoned and is FEE based NOT commissioned based. If you want to learn more about the importance of fee based advisor click Here and click services=>Investing=>Wiser Advice and to learn about the importance of investor behavior visit behaviorgap.com.
Here's some quotes to ponder as you look at your investment strategy.
"Investing has and always been, and will remain, an operation in which wealth is transferred from those without a working knowledge of financial history to those who have one." -William Berstein
“It’s bad enough that you have to take market risk. Only a fool takes on the additional risk of doing yet more damage by failing to diversify properly with his or her nest egg. Avoid the problem—buy a well-run index fund and own the whole market.” -William Berstein
“You don’t need to participate in [the financial system's] expensive foolishness. If you choose to play the winner’s game of owning businesses and refrain from playing the loser’s game of trying to beat the market, you can begin the task simply by using your own common sense, understanding the system, and investing in accordance with the only principles that will eliminate substantially all of its excessive costs.” -John C. Bogle, Vanguard
“The biggest investment mistake people make is focusing on last year’s mutual fund performance and not on what really drives returns.” -Barbara Raasch, Ernst and Young
"In the short term the market is a voting machine, in the long run it is a weighing machine." Benjamin Graham (father of value investing and author of "Security Analysis")
“To invest intelligently in securities one should be forearmed with an adequate knowledge of how the various types of bonds and stocks have actually behaved under varying conditions—some of which, at least, one is likely to meet again in one’s own experience. No statement is more true and better applicable to Wall Street than the famous warning of Santayana: ‘Those who do not remember the past are condemned to to repeat it.’” -Benjamin Graham
So, to take these stock market proverbs to heart you should do three things; Keep Cost Low, Diversify, and Invest For The Long Term.