Sat 19 Aug 2006
Whatever you do: Don’t Panic!
The natural human reaction to fear is adrenaline and increased hart rate - so that you are ready to run. This may be useful in many situations. It is not so useful in the stock market. You will most likely start to panic when it goes down, and not see the rational buy opportunity.
Mutal Funds that panics a lot have a lower return
Quote: “A Morningstar study showed that funds with less than 20% annual turnover beat funds with more than 100% annual turnover by 1.6 percentage points per year over the past 10 years.
The trick to beating the market, then, is to remain cool, calm, and collected. Maybe even knock back a martini in the shade as the market plunges.”