In 1949, Benjamin Graham wrote The Intelligent Investor. Warren Buffett, one of today’s great investors, recently stated that this book changed his life when he was 19 and starting his career. In the recent turmoil of the markets, a look back to Mr. Graham’s advice is timely.
He differentiated between a speculator and an investor. He wrote that the speculator is focused on “anticipating and profiting from market fluctuations.” On the other hand, “the primary interest of an investor lies in acquiring and holding suitable securities at suitable prices.” Moreover, the investor should understand that stocks may fall 33% or more at least once every five years.
1949 was a long time ago and a lot has changed since then, but are things really different? It is important to stay invested, be diversified, stick with quality, and focus on the long term.
-Cliff Jarvis