Wisdom of Great Investors
http://www.scribd.com/doc/12816136/Wisdom-of-Great-Investors
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The Wisdom of Great Investors
1. Avoid Self-Destructive Investor Behavior
2. Understand That Crises Are Inevitable
3. Don’t Attempt to Time the Market
4. Be Patient
5. Don’t Let Emotions Guide Your Investment Decisions
6. Recognize That Short-Term Under performance Is Inevitable
7. Disregard Short-Term Forecasts and Predictions
8. Conclusion
9. Summary
............................................................................
1. Avoid Self-Destructive Investor Behavior
Emotions can wreak havoc on an investor’s ability to build long-term wealth. This phenomenon is illustrated in the study below. Over the period from 1988-2007, the average stock fund returned 11.6% annually, while the average stock fund investor earned only 4.5%.
Why did investors sacrifice nearly two-thirds of their potential return? Driven by emotions like fear and greed,they engaged in such negative behaviors as chasing the hot manager or asset class, avoiding areas of the market that were out of favor, attempting to time the market, or otherwise abandoning their investment plan.
http://www.scribd.com/doc/12816136/Wisdom-of-Great-Investors
Go to the source document for more gems like this one:
The Wisdom of Great Investors
1. Avoid Self-Destructive Investor Behavior
2. Understand That Crises Are Inevitable
3. Don’t Attempt to Time the Market
4. Be Patient
5. Don’t Let Emotions Guide Your Investment Decisions
6. Recognize That Short-Term Under performance Is Inevitable
7. Disregard Short-Term Forecasts and Predictions
8. Conclusion
9. Summary
............................................................................
"Individuals who cannot master their emotions are ill-suited to profit from the investment process."
- Ben Graham, Father of Value Investing
1. Avoid Self-Destructive Investor Behavior
Emotions can wreak havoc on an investor’s ability to build long-term wealth. This phenomenon is illustrated in the study below. Over the period from 1988-2007, the average stock fund returned 11.6% annually, while the average stock fund investor earned only 4.5%.
Why did investors sacrifice nearly two-thirds of their potential return? Driven by emotions like fear and greed,they engaged in such negative behaviors as chasing the hot manager or asset class, avoiding areas of the market that were out of favor, attempting to time the market, or otherwise abandoning their investment plan.
Great investors throughout history have understood that building long-term wealth requires the ability to control one's emotions and to avoid self-destructive investor behavior.
