DWM Blog Act, don't react

Long-term successful equity investing is neither intellectual nor financial, but temperamental: it is how one reacts, or chooses not to react, to market declines. As the new year kicks off, I thought it would be helpful to briefly recap our shared investment philosophy (I hope you agree), and then share some comments on where we are today. As always, I welcome your comments and phone calls. GENERAL PRINCIPLES You and I are long-term, goal-focused, plan-driven equity investors. We believe that the key to lifetime success inequity investing is to act continuously on a specific, written plan. Likewise, we believe substandard returns and even investment failure proceed inevitably from reacting to (let alone trying to anticipate) current economic/market events. We're convinced that the economy cannot be consistently forecast, nor the markets consistently timed. Therefore, we believe that the only reliable way to capture the full long-term return of equities is to ride out their frequent but historically always temporary declines. Just in the last four decades or so, the average annual price decline from a peak to a trough in the S&P 500exceeded 14%. One year in five, the decline has averaged at least twice that. And on two occasions (in [...]The post Act, don't react appeared first on Doyle Wealth Management.