You may have noticed that the stock market has experienced a few difficult days recently and volatility has picked up considerably. After yesterday’s close, the S&P is now at the same price it was at the end of November. But also know that it is still up over 12% in the last 12 months (and up 72% over the last 5 years!).
We know times like these can be stressful, so we always try to let you know our current thinking.
“The time to do lifeboat drills is not after the ship has struck an iceberg”
– Nick Murray
In last month’s article, we focused on “Having a Good Memory” as one of the great qualities to adopt for anyone who wants to become a great investor. This month we focus on a similar, but slightly different quality…Great Investors Don’t get Surprised
Surprise is the Mother of Panic
Great investors understand that all good investing is really simply an exercise in the control of our emotions in the face of uncertainty about the future. In particular, there is an inverse relationship between the intensity of the emotion that we may be experiencing at any given moment, and our ability to think and act rationally. As our emotions crank up, our ability to act effectively begins to deteriorate. As a result, emotion is the enemy of sound investing policy.