No Panicking! January 23, 2008
Posted by Andy Robinson in : Market Research , add a commentNow is the time when normal investors get fleeced. Warren Buffet once said, “Be fearful when others are greedy and greedy only when others are fearful.” Unfortunately individual psychology tends to move along with the pack. When the stock market was skyrocketing in the 90’s, most investors didn’t have the willpower to trim tech positions and reallocate to bonds, cash and defensive equities. The same is true now. It takes willpower to not sell out of the stock market and to keeping adding new positions. The key to investing success is to have the right portfolio mix between different asset classes, which is determined by length of time until retirement and financial goals. I am young and completely in equities. Although this bear market is painful in the short term, I am confident that the stock market will soon find a bottom after a bit more volatility, and that the second half of the year will be marked by a strong rebound as soon as it becomes clear that the worst of the turmoil is behind us.