I am glad to share the first edition of the "Dean's letter" a monthly newsletter about investing. This might be especially relevant to our students but is available to everyone.
You can download the October Dean's Letter here
and on the same topic below you can view my today's appearance on Bloomberg Television:
While investing we all tend to perform very poorly in managing our emotions. Ironically everyone keeps buying shares/funds at the top of their valuations and doesn't even want to think about buying when the best pricing is available and there is a market crisis. The best time to buy is not when everyone is buying but when everyone is selling !
As explained in my paper it might be very difficult to time the market and pick the right shares. For this very reason small investors can gain exposure to equities through a good mutual fund. In my next letter I will share some ideas on how to pick the right fund.
Reader commentary
a.r.e.behery@hotmail.com
November 7th, 2008 at 10:07pm
I THINK THAT THE MARKET INTERNATIONAL CRISIS WILL REMAIN FOR A LONG TIME AND IT IS HARD FOR ANY ONE TO KEEP HIS INVESTMENT IN STOCKS FOR THIS PERIOD FOR THIS REASON A GREAT NUMBER OF SHARE HOLDERS RUNNING TO GETRID OF WHAT THEY HAD AS THEY THINK THAT THE PRICE OF THE STOCKS WILL BE ZERO AND NO ONE CAN SPECIFY WHEN THIS CRISIS WOULD BE OVER
a.r.e.behery@hotmail.com
November 7th, 2008 at 10:06pm
I THINK THAT THE MARKET INTERNATIONAL CRISIS WILL REMAIN FOR A LONG TIME AND IT IS HARD FOR ANY ONE TO KEEP HIS INVESTMENT IN STOCKS FOR THIS PERIOD FOR THIS REASON A GREAT NUMBER OF SHARE HOLDERS RUNNING TO GETRID OF WHAT THEY HAD AS THEY THINK THAT THE PRICE OF THE STOCKS WILL BE ZERO AND NO ONE CAN SPECIFY WHEN THIS CRISIS WOULD BE OVER
Damian Del Toro
October 15th, 2008 at 12:00pm
Well said, Prof. Costa; now is definitely the time to buy. Those that seek immediate gratification are missing the entire point about investing in the first place. Not surprisingly, these same investor types suffer the greatest losses when the cycles reach their low points. A mid to long-term investment mindset and commitment will help overcome the roller-coaster effects the shaken market is presently suffering.
Cheers,
Damian