I read an article this morning which contained this little snippet as a paragraph...
I talk about this often. Investors damage themselves - the market just moves up and down like waves on the ocean... It's when the investor doesn't understand what they own or have invested in names where their expectations are on the gambling side vs investing - that's when the panic sets in...
I've also taught myself to look at my finances as a WHOLE. I might be down in one or two or three investments - but if as a total I'm up - and I know for a fact that I'll never have every single investment in the green - I'm okay with it.
Any market segment can have some sort of event that even if unjustified fundamentally can still do permanent portfolio damage to the investor whose panic threshold is breached. This is why diversification and emotional control are both so important to long term investing success.
|