Better ignored Michel Pireu     | Business Day Tuesday, March 12, 2019
Things people say that you should ignore:

“Buy low, sell high.” No myth is more pervasive among amateur investors, encouraging them to load up on shares that have lost some of their value. Stocks going to zero have to pass through all-time lows; those going through the roof must go through all-time highs. Why would you want to buy the losers and ditch the winners?

"You can't time the market." That old chestnut that keeps clients fully invested. Certainly it's a fool's errand to try to catch the market's twists and turns. But that doesn't mean you have to suspend judgment about overall valuations.

“It’s a good time to invest in the market." Really? When was the last time you heard someone that’s going to make commission on a trade say that it was a bad time to invest?

"To earn higher returns, you have to take more risk." Mr Buffett is obviously unaware of this one since he keeps investing in boring companies, in boring industries. As for risk, it often gets confused with volatility, which just means prices going up and down as opposed to the possibility of losing principal.

“Knowing something is better than knowing nothing.” The cost of investing in something you don’t fully understand can be substantial. A partially informed investor is about as effective as a partially informed surgeon.

“The young can afford to take risks.” Of all the myths in the market, this may be the cruellest. If any group needs to watch every penny, it's the young. They’re the ones starting a family, needing to buy a house and save for the future, usually while still at the lower end of the earnings range. In other words with precious little disposable income. However, they do have an invaluable asset on their side: Time. This means they don't need to take risks.
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