GEICO's former CEO Lou Simpson has revealed some wise words. They go back to investing for the long term and to not engage in active trading. "Attempting to guess short-term swings in individual stocks, the stock market or the economy is not likely to produce consistently good results. Short-term developments are too unpredictable. On the other hand, owning shares of quality companies run for the shareholders stands an excellent chance of providing above-average returns to investors over the long term. Furthermore, moving in and out of stocks frequently has two major disadvantages that will substantially diminish the results, transaction costs and taxes. Capital will grow more rapidly if earnings compound with as few interruptions for commission and tax bites as possible"
Simpson returned 24.7% on average annually for 17 years.
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