My first big lesson was during the crash of 1987. I remember sitting next to a Quotron, watching tick by tick as clients’ money just melted away. The calls were pouring in. Many clients wanted to bail. But the reality was, it was too late to sell. “Stay put,” we told them. “Don’t panic. This market will rebound. If you panic and sell now, you’ll miss out.” In fact, two years later, the market was back. If you had sat tight, you’d have weathered the storm.
When everyone else is losing their heads, you’ve got to keep yours. And it’s as true in up markets as in down. Remember 2000, when tech-heavy investors insisted there would be no end to the bull run? They refused to rebalance their portfolios. They pushed their bets, and when the bubble popped, those portfolios suffered.
The key is discipline. You’ve got to think like a fiduciary of your own assets. Make your investment plan and stick to it. Be unemotional.
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