Quote of the Month: No Profit in Yesterday’s Growth
“To quote the legendary Warren Buffett, ‘the investor of today does not profit from yesterday's growth’. As much as we are warned that past performance is no guide to the future results, many investors still switch to the latest hot offerings.
“Investors should remember that returns don’t happen in straight lines and they seldom occur when one expects them to. It’s vital to separate emotion/sentiment from an investment portfolio. Often the most beleaguered investments turn out to be a great opportunity for future returns, as investors can access these investments at a good price. Volatility creates opportunity and short-term underperformance can translate into a solid, longer-term upside.
“Trying to chase performance can be extremely harmful to an investor’s returns over the long-term. It’s rare for even professionals to consistently time investment in to and out of the market over time. Besides, one needs to consider the costs of trading funds, which is likely to only make matters worse.
“A well-diversified portfolio that is designed to meet your investment goals whilst remaining within your risk tolerance is a far better solution, and much likelier to result in long-term investment success than trying to buy yesterday's winners.” (Emphasis supplied)
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