THE FATHER BLOG

“The market is crashing! I have to sell off my portfolio before I lose everything!”

“Prices are rising…I have to buy now or I’m going to miss out!”

Yes…this is why many people fail or can’t handle the stock market. They follow the fear/FOMO (fear of missing out) and haven’t done their research and maintain conviction in the stocks they were supposed to do their due diligence. Now who am I to tell you this? I’m nobody….I’m just passing along some advice from Warren Buffett again. And he is someone you should probably pay attention to if you’re in or looking to get into the market.

Here is a snippet of an article from the Motley Fool. They often have very good investing information on their site….worth a visit for sure.

The real secret to Buffett’s success and the biggest danger to average investors

There’s no doubt that Buffett is an excellent stock picker. However, the real secret to his success was that he maintained conviction in his stock picks, even when they underperformed for an extended period. That’s because he continuously evaluated the businesses underlying the stocks relative to their valuations to determine whether they remained great investment opportunities.

But Buffett noted, “Most investors, of course, have not made the study of business prospects a priority in their lives,” in his 2013 letter to shareholders. While studying individual businesses and developing a portfolio can produce excellent returns for investors, someone who does so without a solid understanding of what they’re buying and why they’re buying it can easily be swayed by market forces to buy or sell at exactly the wrong times, leading to poor performance over the long run. That’s why Buffett recommends the investors he describes above invest in an S&P 500 index fund.

But even index fund investors can be susceptible to the behavioral challenges of investing. “The main danger is that the timid or beginning investor will enter the market at a time of extreme exuberance and then become disillusioned when paper losses occur,” Buffett wrote. “The antidote to that kind of mistiming is for an investor to accumulate shares over a long period and never to sell when the news is bad and stocks are well off their highs.” In other words, make a plan to consistently invest some of your income at set intervals (say, every month or every paycheck), and don’t sell when the market crashes if you don’t have to.

Whether you’re an index fund investor or a stock picker, Buffett’s advice is clear: You must maintain conviction in your investments if you want to succeed. Without it, you’re likely to fall prey to the many psychological pitfalls involved in investing. As long as your investment decisions are grounded in solid reasoning that you can back up with logic and analysis, you should be able to withstand the challenge.

Despite his nickname, “The Oracle of Omaha,” Buffett never felt the need to accurately predict the future of every possible investment. Understanding just a handful of investments was good enough to outperform the market for 70 years. “Omniscience isn’t necessary,” he wrote in 2013. “You only need to understand the actions you undertake.”

On Fridays I sometimes just like to go to Google Trends and see what it being searched both here in the United States and also around the world. Today’s common search around the globe was Djokovic vs Sinner at the Australian Open. I enjoy tennis…it’s a great sport and I used to play for fun as a kid/teenager and even hit the ball around with the kids on occasion. But since I really haven’t watched it in years, I didn’t realize that Tennis is still so popular.

https://ausopen.com

I’m going to guess in the coming weeks we will likely all be searching for anything and everything Olympics related in addition to anything stupid people are doing or “influencers” are saying. But for now, enjoy some tennis and a wonderful weekend!

I’m off again soon to Florida for another trip. This one is definitely leisure and I’ll be hanging out with a good friend for a few days. There will beer/liquor involved so it will definitely give me a solid Booze Tuesday post in the week that follows.

I’m looking forward to a break from the snow, ice, and single digit temps we are getting here for the foreseeable future. I am also fortunate enough to have multiple inexpensive flights to Florida from Philadelphia daily. If you are traveling light, Frontier Airlines is the cheap, no frills way to go. I think my round trip flight was under $100.

Here is my suggestion if you like to travel like I do and sometimes on short notice. Start with a simple Google search of “where can I fly direct” or give it the ChatGPT search based on your local airport. If you are flexible, you can find some amazing deals and get away if you need a break. I will say that PHL airport has a fantastic site: https://www.phl.org/WWF. Maybe your local airport does too?

So I’m off soon enough for some sun, fun, and Floridays! Are you going to plan your next trip? Where are you headed?