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Don't chase performance from "summary" of The Little Book of Common Sense Investing by John C. Bogle
The most important lesson I can impart on investors is to resist the temptation to chase performance. This notion is deeply ingrained in the investment world, where individuals are constantly seeking the next big opportunity to make a quick profit. However, this mentality often leads to chasing performance, which can be a dangerous game to play. Many investors believe that by following the latest trends or investing in the hottest stocks, they can outperform the market and achieve higher returns. However, this approach is based on speculation rather than sound investment principles. In reality, trying to time the market or pick winning stocks is a risky endeavor that is more likely to result in losses than gains. Instead of chasing performance, I advocate for a more disciplined and patient approach to investing. By focusing on long-term, broad-based index funds, investors can achieve consistent and reliable returns over time. Index funds provide diversification, low costs, and a simple way to invest in the entire market, rather than trying to beat it. Furthermore, by staying the course and avoiding emotional reactions to market fluctuations, investors can benefit from the power of compounding and the long-term growth potential of the stock market. This requires discipline, patience, and a commitment to a proven investment strategy.- The concept of not chasing performance is a fundamental principle of successful investing. By avoiding the temptation to seek quick profits or follow the latest trends, investors can achieve their financial goals and build wealth over time. Stay the course, stick to a sound investment strategy, and let the power of compounding work in your favor.
