As we are slowly accepting the New Normal and is sorting out our lives to live with the new set up. Still, some of our systems/routines are reluctant with the adjustments.
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One aspect is our Financial Investments, specifically, the Stock Market. Stocks are slowly making a come back, but we can't deny that it will take several years to recover what was lost. It is not an easy process, and as long as we still don't have the vaccine, any jitters will still rock the market.
However, Warren Buffet, one of the most renowned investor has some advise during this challenging times. The advise was not penned in 2020 though... the advise was given way back 1986!
Warren Buffet's Financial Advise
"We must, of necessity, hold marketable securities in our insurance companies and, as money comes in, we have only five directions to go"
The Five Marketable Securities Directions
- Long Term Common Stock Investments
- Long Term Fixed Income Securities
- Medium Term Fixed Income Securities
- Short Term Cash Equivalents
- Short Term Arbitrage Commitments
As per Buffet, the Common Stocks are the most fun, if the conditions are right. He added, however, that there is no way of knowing whether the market will go up, down, or sideways. In other words, stock direction is unpredictable and uncontrollable.
Because of this, occasional outbreaks of two super contagious diseases (Fear and Greed) will forever occur in the investment community.
The Holy Grail Advise
"Therefore, we never try to anticipate the arrival or departure of either disease."
"Our goal is more modest: we simply attempt to be fearful when others are greedy and to be greedy only when others are fearful."
His 1986 advise may sound simple but we all know that this is easier said and done. No matter how systematic we are, unpredictable situations like this pandemic can throw off our routine. Giving life to the two contagious diseases.
If you want further reading, you can read the whole 1986 newsletter HERE and go to Marketable Securities.
My personal advise?
"SUCCESS = Patience + Consistency + Faith"
Let me know your perspective by commenting below!
