Be Greedy When Others Are Fearful – Investment Planning

Be Greedy When Others Are Fearful - Investment Planning

The famous investor and philanthropist Warren Buffet (he of the $61 billion fortune) was once quoted as saying:-

“A simple rule dictates my (equity) buying: Be fearful when others are greedy, and be greedy when others are fearful. And most certainly, fear is now widespread, gripping even seasoned investors. To be sure, investors are right to be wary of highly leveraged entities or businesses in weak competitive positions. But fears regarding the long-term prosperity of the nation’s many sound companies make no sense. These businesses will indeed suffer earnings hiccups, as they always have. But most major companies will be setting new profit records 5, 10 and 20 years from now.”

Basically what he was saying was don’t follow the herd of buying on the way up and selling on the way down. He said that back in 2008 and it could surely be a maxim to be adopted in 2016 with the stockmarket turmoil that we are witnessing. Easy for a man of his fortune to say such a thing perhaps but interesting insight nonetheless from a hugely successful investor. For most, a sensible strategy of not crystallising losses and trying to invest normally with regular contributions and the occasional single premium when prices are low should prove profitable in the medium to long term.