For the Year Ahead: Words of Wisdom from the Investing Wise

As we brace for a long winter, continue to look forward to the better times ahead. Here are some thoughts from the world’s greatest investors on persevering through difficult times:

“To be an investor, you must be a believer in a better tomorrow.”
— Benjamin Graham

History reminds us that, in the short run, life is full of setbacks. The pandemic has been no exception. History also shows that over the long run, we have continued to advance and progress. Even the worst periods of retrenchment have been followed by new growth, economic expansion and progressing equity values.

“You need to be able to look at the facts about a business, about an industry, and evaluate a business unaffected by what other people think. That is very difficult for most people…Don’t do anything in life where the answer is, “everybody else is doing it.” If you cancel that as a rationale for doing an activity in life, you’ll live a better life whether it’s in the stock market or any place else.”
— Warren Buffett

Success in investing often means having the confidence to make decisions independently and not based on what everyone else may be saying or doing.

“More money has been lost trying to anticipate and protect from corrections than actually in them.”
— Peter Lynch

During times of downward volatility, there may be an urge to act to protect the value of investments. However, the rapid fall of equity markets in the spring of 2020 and the quick rebound should remind us that equity markets can quickly change direction, often with little or no notice. Timing the markets is a difficult, if not impossible, task.

“Any sound long-range investment program requires patience and perseverance. Perhaps that is why so few investors follow any plan. Investment success is the purpose of investment planning; but a by-product of a good plan is peace of mind.”
— John Templeton

A well-constructed wealth plan includes techniques that have been put in place to help to weather difficult periods. These include holding quality investments, maintaining appropriate diversification and strategic asset allocation, and focusing on individual risk tolerance levels. Having the discipline to stick to the objectives set out in your plan, especially during more challenging times, can be one of the hallmarks of successful investing.