What is the most common investor mistake? Trading - getting in and getting out at all the wrong times, for all the wrong reasons. Kenneth Fisher More Quotes by Kenneth Fisher More Quotes From Kenneth Fisher Having different types of stocks in your portfolio can enhance returns. Kenneth Fisher portfolios return different A constant in my approach to investing: You should think politically but unconventionally. Kenneth Fisher investing should thinking All equity categories, correctly calculated, create near-identical lifelong returns. They just get there via wildly differing paths. Kenneth Fisher categories return path Both cheap value stocks and more glamorous growth stocks can work well in a portfolio - if done right. Kenneth Fisher portfolios growth done Normally, if you have a huge category that leads a bear market all the way down to the bottom - like tech after 2000, or energy in the '80-'82 bear market - you get one quick pop, and then years of lag as we fight the old war. Kenneth Fisher fight you war way Many follow a rule of thumb - no more than 5% in one stock. But that's not the entrepreneurial road to riches. Kenneth Fisher follow than road more Plenty of funds have fine long-term returns despite being tax-inefficient and generally costly. But a dirty secret is this: Average, no-load fund investors do much worse than the funds - or the market. Kenneth Fisher being fine secret dirty Normally, the market peaks before bad news emerges. That's what happened in 1929, and that's what happened in 2000. Kenneth Fisher market bad happened news I'm sometimes accused of being hostile to mutual funds. That's not fair, really. There is a place for them. Still, I am hostile to one thing, which is trying to use funds to time your way in and out of the market. That's a recipe for very bad results. Kenneth Fisher i-am place time sometimes The stock market is a discounter of all known information. Kenneth Fisher stock-market market known information Long before folks fretted the demise of 'quantitative easing,' I fretted its existence. It proved the reverse of its image, an antistimulus, and we've done okay not because of it, but despite it. Kenneth Fisher image okay done long China frequently confounds stock market prognosticators because it has a penchant for straying markedly from other broad global indexes year-by-year over the decades - even from emerging markets. It's hit or miss. Kenneth Fisher stock-market miss over china Environmentalists should like fracking for its relative cleanliness. But they don't. They have made a bugaboo out of the chemicals in fracking fluids, which supposedly can leach into groundwater sources. I'm convinced they're dead wrong. Ultimately, good technology with a cost advantage will win out over paranoia. Kenneth Fisher dead good win technology In history, the evidence is overwhelming: Stock market bottoms happen, and then stocks jolt upwards while the economy keeps getting worse - sometimes by a lot and for a long time. Kenneth Fisher time sometimes long history The latter part of bull markets are typically led by stocks that are seen then as high quality, but the ones that do best are the ones that weren't seen as such high quality before. Kenneth Fisher high seen best quality People do dollar cost averaging because they have regret of making one big mistake. But the fact of the matter is that, mathematically, the market rises more of the time than it falls. It falls, but it rises more of the time than it falls. Kenneth Fisher regret mistake time people If you can predict where the market's going, just do what you can predict. If you can't, which is the presumption of dollar cost averaging or time cost averaging, either one, then you're trying to ease in. But if the market rises more than it falls most of the time, easing in is, by definition, a loser's game. Kenneth Fisher game you loser time I never liked quantitative easing. It's misunderstood by almost everybody. Flattening the yield curve is not stimulative; flattening the yield curve is anti-stimulative. Kenneth Fisher almost never everybody misunderstood Anyone can see how if a feared tax hike doesn't happen, that's a positive factor. But even if tax hikes happen as feared, vast history tells me it doesn't have to have the big bad impact folks fear. And fear of a false factor is always bullish. Kenneth Fisher me fear positive history Readers regularly ask what can go wrong but almost never what could positively surprise. Kenneth Fisher wrong never go surprise
