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Stay the course from "summary" of The Little Book of Common Sense Investing by John C. Bogle
The fundamental concept that investors must keep in mind is the importance of staying invested in the market for the long term. This idea may seem simple, but it is crucial for success in the world of investing. By staying the course, investors avoid the dangers of market timing and emotional decision-making, which can lead to costly mistakes. When investors try to time the market by buying and selling securities based on short-term market movements, they are essentially gambling with their money. Market timing is a losing game because it is nearly impossible to predict the direction of the market with any consistency. Even professional money managers struggle to outperform the market over the long term, so individual investors are unlikely to do any better. Emotional decision-making is another pitfall that can derail an investor's success. When the market is in turmoil and stock prices are falling, it is easy to panic and sell out of fear. However, selling low is the exact opposite of what investors should be doing. By selling in a downturn, investors lock in their losses and miss out on the eventual rebound when the market recovers. The key to successful investing is to have a long-term perspective and to stay invested through the market's ups and downs. By diversifying their holdings across a mix of stocks and bonds, investors can reduce their risk and increase their chances of achieving their financial goals. This strategy, known as asset allocation, is a proven way to build wealth over time while minimizing volatility.- Staying the course means resisting the urge to time the market or make emotional decisions based on short-term fluctuations. By staying invested in a diversified portfolio for the long term, investors can maximize their chances of success and achieve their financial goals.
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