tailieunhanh - The Elements of Investing by Burton G. Malkiel and Charles D. Ellis Dec 14, 2009_6

Tham khảo tài liệu 'the elements of investing by burton g. malkiel and charles d. ellis dec 14, 2009_6', tài chính - ngân hàng, tài chính doanh nghiệp phục vụ nhu cầu học tập, nghiên cứu và làm việc hiệu quả | Avoid Blunders In addition to the timing penalty there is also a selection penalty. When money poured into equity mutual funds in late 1999 and early 2000 most of it went to the riskier funds those invested in high tech and Internet stocks. The staid value funds which held stocks selling at low multiples of earnings and with high dividend yields experienced large withdrawals. During the bear market that followed these same value funds held up very well while the growth funds suffered large price declines. That s why the gap between the actual returns of investors and the overall market returns is even larger than the two percentage point gap cited earlier. Fortunately there s hope. Mr. Market can only hurt us if we let him. That s why we all need to learn that getting tricked or duped by Mr. Market is actually our fault. As Mom said we can only get teased or insulted or hurt by bad people if we let them. As an investor you have one powerful way to keep from getting distressed by devilish Mr. Market Ignore him. Just buy and hold one of the broad-based index funds that we list on pages 117 119. MORE MISTAKES Psychologists have identified a tendency in people to think they have control over events even when they 85 The Elements of Investing have none. For investors such an illusion can lead them to overvalue a losing stock in their portfolio. It also can lead people to imagine there are trends when none exist or believe they can spot a pattern in a stock price chart and thus predict the future. Charting is akin to astrology. The changes in stock prices are very close to a random walk There is no dependable way to predict the future movements of a stock s price from its past wanderings. The same holds true for supposed seasonal patterns even if they appear to have worked for decades in the past. Once everyone knows there is a Santa Claus rally in the stock market between Christmas and New Year s Day the pattern will evaporate. This