Talking a mean game
“Before investing, many will tell you that they can stomach a 20% decline—they can ‘tolerate’ such a risk. But when it actually happens, and real dollars are at stake, the true test begins.... [Remember,] there’s no free lunch. The premium you earn from owning equities over bonds/cash is primarily due to the higher volatility and drawdowns you must stomach over time.”
– Market strategist Charlie Bilello, in a 3/17/25 blog post. Read more at bit.ly/3YOm98B.
The power of inaction
“It’s natural to respond to market volatility in an adverse way—we were wired that way for good reason (self-preservation). Therefore, for many successful investors, and perhaps for you—if you already have a well-diversified portfolio designed to accommodate your willingness, need, and ability to take risk—the best action to take may be inaction. As the late (and truly great) Charlie Munger said, ‘The big money is not in the buying and the selling, but in the waiting.’”
– Financial advisor Tim Maurer in a 4/20/25 post on his Financial LIFE Planning blog. Read more at bit.ly/4cM6xbw.
Prone to wander
“Everyone has a lesser version of themselves you need to watch out for when volatility strikes. This is why an investment plan is so important during times like these.”
– Investment writer Ben Carlson, in a 4/13/25 post on his A Wealth of Common Sense blog. Read more at
bit.ly/42NnVIi.
Past performance
“There is one important exception about the perils of making decisions based on past performance: The success of trend-following strategies, which are explicitly past performance focused. If there is evidence of this working, why is performance chasing such a problem?
“There is a critical distinction. The success of systematic trend-following strategies is about the consistent application of discipline and rules. Conversely, most investors engage in erratic trend-based investing (we invest in things because they have ‘gone up’) and rationalize the decision based on some post-hoc fundamental analysis.”
– Joe Wiggins in a post on his Behavioral Investment blog. Read more at bit.ly/42Teybk.
Tune out
“The more you engage with...speculative or sensational [media content], the more likely you are to act impulsively.... Studies have shown that consuming excessive financial news and checking your portfolio too often are linked to lower investment performance. When you engage in this behavior, it becomes harder to separate signal from noise, and the pressure to ‘do something’ increases.”
– Retirement researcher Wade Pfau, in a recent blog post. Read more at bit.ly/434lUc6.
