Quote for the Week
Those wonderful statistics on long-term returns are what the market did, not what any single individual or fund did, or would do, if history replayed itself. In my real-world experience, investors with smaller allocations to stocks and with some anchors to windward have been the ones most likely to be the winners over the long haul. The crucial element of success is the ability to make decisions without freezing up or slamming the panic button. In bear markets, the muted volatility and the contractual safety of bonds provide the most congenial environment for arriving at rational decisions about stocks. In bull markets, the balanced portfolio may not make for lively cocktail-party conversation, but with 60 percent in stocks, your wealth will still be participating and growing.
I cannot overemphasize the importance of this last point. Few decisions in life motivated by greed ever have happy outcomes. Unless you are that rarest of birds, someone who is cool under the rapid-fire, high-pressure decision making required to maximize your returns, let others take such risks, and allow your portfolio to plug along at a slower speed. In investing, tortoises tend to win far more often than hares over the turns of the market cycle (and, as we have recently been reminded, markets still do have cycles). — Peter Bernstein (source)
From the Archives
Last Call
- Worry About the Right Things – Irrelevant Investor
- Three Golf Stories About Investing – I. Cassel
- Risky Business – Humble Dollar
- Why Investment Complexity Is Not Your Friend – Morningstar
- The Curse of Investing in Large Caps – Klement on Investing
- Agility and Resilience – Uncertainty of It All
- Joel Greenblatt: ‘There’s a Big Opportunity Set Out There’ – Investors’ Chronicle
- Enduring Investing and Life Lessons with Guy Spier (podcast) – Excess Returns
- Make Something Wonderful: Steve Jobs in His Own Words – Steve Jobs Archive
