Market volatility always picks up at random moments every year and somehow investors seem surprised about it. Being less surprised is one of the keys to investment success.
In fact, it’s so important that Ben Graham dedicated a chapter to handling market fluctuations in his classic The Intelligent Investor. His parable of Mr. Market has been retold by others (here, here, and here) over the years for the same reason.
Mr. Market has a crazy streak. He also happens to be your partner in a number of business ventures. Mr. Market shows up day after day quoting a price to buy your shares or sell you his.
And every so often, his craziness peaks and he rattles off some ridiculous prices for those shares. Sometimes those price quotes are much higher than they were the week before. Sometimes they’re much lower. And since Mr. Market is so unpredictable, there’s no telling what prices he’ll offer up next week.
Now, it’s up to you to decide if you want to listen. You can take advantage of the offer or you can do nothing. Continue Reading…