Slow and Steady Wins the Race

27May09

It is a common understanding that if you can buy low and sell high, you’ll do well. However, the average investor can very rarely put this theory into practice. The emotion of fear on the downside is much stronger than the exuberance of joy on the upside, and the average investor will usually end up getting it exactly backwards.

An article in today’s Metro, in Portland, OR talks about this typical investor pattern. They use a study from Boston-based consulting firm Dalbar, using an original investment of $10,000. Tracking the S&P 500 over the last 20 years the slow and steady (in the market) investor would have amassed nearly $50,000, while the more erratic (average) investor has just shy of $15,000. It goes to show that even through outrageous markets like we’ve seen recently, it pays huge dividends to simply stay the course.

The long-term approach and the importance in remaining invested is a core belief of our firm. If you would like to learn more about how this has worked for our clients, and what we are currently focusing on, please feel free to contact us at anytime.

Best regards,

Ron Sloy

Learn more about Ron Sloy.

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