People tend to believe that whatever is doing well at the moment will always do well. In the 1990s everybody said value investing was dead and never to return, but managers who stuck to their guns obviously proved that wasn't the case.
I have a feeling this market is going to stay very volatile. But it's day-to-day volatility. It scares you. but it shouldn't change your investment strategies.
For people who are looking to get into this market, they probably should not have more than 20 percent in tech.
I know people think three days is long term in the market these days. But if you're a long-term investor, 2, 3, 4 percent swings, which are big moves in a day, are meaningless when you look back.
For small investors, they probably aren't the place to be.
It sounds like a broken record, and it's boring. It's something we definitely don't want to keep rubbing in people's faces. But it goes to show that diversification works.
In sector plays, you should buy after a down period, when the numbers look terrible. But when you look at a fund, if similar funds have done well and one fund has done poorly, you don't use that logic.
When people buy the hottest stocks or the hottest funds, they end up having less and less diversification.
Investors have been buying a lot of securities in the last year that haven't made a lot of sense to buy. They bought stocks without knowing why, and so now they're selling stocks without knowing why.
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