“Long-term investment success is ultimately determined by the ability to ignore external ‘noises’ and concentrate on the issue of buying good businesses.”
~ Michael Lee-Chin
Chasing past performance
“All things being equal, if investment decision making was rational, then we would have seen record purchases of mutual funds in 2020 when investment prices were on sale, and a return to regular buying activity in 2021 after the big sale was over. Instead, we saw people stop buying in 2020 because the future was very uncertain, only to buy in record amounts in 2021, after prices had increased.
Something to keep in mind the next time investments go on sale. Do you want to buy before prices go up by 30%, or after?”
Posted in All Columns, Investment Management, Risk Management