Who is Shorty? Well you see him on TV, read what he says in the newspapers and hear from him on a daily basis. He is the market’s con man, its broker, its investment banker, trying to seduce you into betraying your well-conceived investment strategy, and boy does he do a good job as the chart below shows.
Source – http://tonyisola.com/2017/07/do-you-invest-like-the-cool-kids/
Listening to Shorty and trying to time the market and making concentrated sector bets have led to disaster for most who have tried.
You are far better off to listen to his older and wiser uncle, Longfellow. He is articulate, patient, disciplined and knows from experience that a long-term investment horizon is the best way to achieve one’s goals. If you approach investing with a long-term mindset as Longfellow does, you’ll not only sleep better and earn more, but you’ll get a good chuckle at Shorty’s sensationalist headlines in the process. Longfellow believes in the power of compounding which requires a long-term investment horizon. The power of compounding is accelerated not only by committing to a long-term plan, but also by the benefits from lower trading costs and taxes.
Regardless of what happens in the markets, stick to your investment program. Changing your strategy at the wrong time can be the single most devastating mistake you can make as an investor (just ask investors who moved a significant portion of their portfolios to cash during the depths of the financial crisis, only to miss out on part or even all of the subsequent 9 year and counting Bull Market that we have enjoyed ever since).
As Longfellow counsels, staying the course is the most important piece of advice he can give you.
Abandon Shorty…Embrace Longfellow
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