Why Investors Shouldn’t Panic At Market Jitters
Posted January 21, 2008 12:00 pm.
This article is more than 5 years old.
Gordon Pape has put his finger on why many people get burned when they invest. In his new book, Sleep-Easy Investing (Viking Canada, 2008), he recounts how investors let their emotions get the better of them. He should know: he has been talking and listening to investors ever since his first investing book, Building Wealth, was published in 1988.
People may read an investing book that tells them they can get an average 9% per year if they only buy and hold stocks over the long term. This is a legitimate claim going by the historical record in North America. Stock markets do go down at times, but as long as investors stay the course, they will be around for the upturn and in the game to earn 9% annually over time.
So they take the leap. However, when the market does crater, the actual experience turns out to be a lot different than reading about it in a book. Newspaper headlines are full of doom and gloom. The permabears get more air time and their theories of cataclysmic decline begin to look more plausible. And so on: it’s truly a scary time, one that can even produce insomnia for some investors – and waves of selling.
To read more of this article, check out Canadian Business online here.
