The Greatest Piece of Investing Advice

Dec 8, 2013
J. Webster
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A lot of fantastic advice from Jason Zweig about investing in the stock market but for me this one is the best and most crucial and absolutely the most difficult:

“Approximately 99% of the time, the single most important thing investors should do is absolutely nothing.” As an investor you should bet seldom and only when the odds of success are substantially in your favor. The temptation of investors is too often toward action when inaction is their friend. Keeping fees and expenses very low is important and avoiding hyperactivity helps with that objective.

Imagine if you bought Apple during the Great Recession, say around $90 a share. Would you have sold when Apple’s stock hit $150 a share or maybe $200? Would you have been able to hold on to it until it hit $400 a share?

Or, better yet, could you hold on to it until it hit $700 a share, and maybe not even sold any, but remained calm and kept it knowing you were now getting paid a dividend each quarter. It’s the beauty of doing nothing, maybe not even looking at certain stocks you own, because you believe long term in the company. And long term meaning as in the next ten or twenty years. Sure, maybe you sell a quarter of your position when the stock doubles or triples but even that’s tough to time just right.

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