The wisdom of great investors #2

The wisdom of great investors #2

“Emotions can wreak havoc on investor returns. Keeping them in check is critical to building long-term wealth.”

 

Charles Munger
Vice-Chairman, Berkshire Hathaway

 

In this second of a series looking at the wisdom of great investors, we focus on the impact that emotional decision making can have on investment outcomes.

Emotions can wreak havoc on investor returns. Keeping them in check is critical to building long-term wealth.

Over the past 20 years, investors who keep their emotions under control built considerably more wealth than investors who were driven by their emotions: US$40,810 versus US$28,057.

To build long-term wealth, investors must remain disciplined, unemotional and focused on long-term goals in the face of inevitable market volatility.

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