Owning equities is an essential part of anyone's portfolio. You just can't ignore it over time. It's going to add the real pop to anyone's overall performance.
Warren StephensRead
Investors repeatedly jump ship on a good strategy just because it hasn't worked so well lately, and, almost invariably, abandon it at precisely the wrong time.
Interpretation
This quote emphasizes the importance of patience in investing, warning against abandoning a promising strategy due to temporary setbacks.
David Dreman highlights a common mistake among investors who often give up on good strategies when they face short-term challenges. This impulsive behavior frequently results in exiting positions at inopportune times, suggesting that successful investing requires sustained commitment and the ability to resist emotional responses to market fluctuations.
In practice
During a finance seminar, this quote can illustrate the pitfalls of emotional decision-making in investments.
Owning equities is an essential part of anyone's portfolio. You just can't ignore it over time. It's going to add the real pop to anyone's overall performance.
It seems to me - particularly for these retirement-plan investors, the vast majority of whom are not particularly financially sophisticated - by far the best way is to invest in index funds.
Most investors would be better off in an index fund.
Growth and value investing are joined at the hip.
Investors should remember that their scorecard is not computed using Olympic-diving methods: Degree-of-difficulty doesn't count. If you are right about a business whose value is largely dependent on a single key factor that is both easy to understand and enduring, the payoff is the same as if you had correctly analyzed an investment alternative characterized by many constantly shifting and complex variables.
If you are predisposed to be patient, disciplined and psychologically appreciate the idea of buying bargains, then you're likely to be good at it. If you have a need for action, if you want to be involved in the new and exciting technological breakthroughs of our time, that's great, but you're not a value investor, and you shouldn't be one.
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