There’s a bewildering amount of advice on how to invest. People divide into camps, schools and strategies, then proselytize on the internet, in books, and on televisions.
It’s worthwhile, especially in today’s volatile markets, to take a look at what’s actually worked, as opposed to what people claim works.
We’ve collected some of the finest wisdom on markets from the most respected and successful investors, past and present.
'Quantitatively based solutions and asset allocation equations invariably fail as they are designed to capture what would have worked in the previous cycle whereas the next one remains a riddle wrapped in an enigma.'
'Investors should remember that excitement and expenses are their enemies. And if they insist on trying to time their participation in equities, they should try to be fearful when others are greedy and greedy only when others are fearful.'
Source: 2004 shareholder letter
'By far the biggest problem for professionals in investing is dealing with career and business risk: protecting your own job as an agent. The second curse of professional investing is over-management caused by the need to be seen to be busy, to be earning your keep. The individual is far better-positioned to wait patiently for the right pitch while paying no regard to what others are doing, which is almost impossible for professionals.'
'You can't develop a portfolio strategy around endless possibilities. You wouldn't even get out of bed if you considered everything that could possibly happen..... you can use history as one tool for shaping reasonable probabilities. Then, you look at the world of economic, sentiment and political drivers to determine what's most likely to happen--while always knowing you can be and will be wrong a lot.'
'The average long-term experience in investing is never surprising, but the short term experience is always surprising. We now know to focus not on rate of return, but on the informed management of risk'
Source: Winning The Loser's Game
'The market does reflect the available information, as the professors tell us. But just as the funhouse mirrors don't always accurately reflect your weight, the markets don't always accurately reflect that information. Usually they are too pessimistic when it's bad, and too optimistic when it's good.'
Source: 2006 Letter to Shareholders
'It's not always easy to do what's not popular, but that's where you make your money. Buy stocks that look bad to less careful investors and hang on until their real value is recognised.' Source: John Neff On Investing
'If you don't have integrity, you have nothing. You can't buy it. You can have all the money in the world, but if you are not a moral and ethical person, you really have nothing.'
Source: Academy of Achievement
'An economy is simply the sum of the transactions that make it up. A transaction is a simple thing. Because
there are a lot of them, the economy looks more complex than it really is. If instead of looking at it from the
top down, we look at it from the transaction up, it is much easier to understand.'
Source: How The Economic Machine Works