Investors or pussys?

“Investors wiped another 5 per cent off the Australian share market…”

So was the opening sentence of the front page article of The West Australian newspaper yesterday (9th October 2008).

It should have read:

“Anxious, emotionally fragile, short sighted sellers wiped…”

Movement in the share market index is based on actual trades completed. For every seller there is a buyer.

Buyers are always out for a bargain – it’s human nature. So would-be-buyers submit a bid below what they think the item is worth just hoping for an anxious seller to come along.

The “investors” at the moment are the buyers with long term vision and emotional control. They are not the ones wiping 5 per cent off the share market.

Do not push the panic buttonRevered investor, Warren Buffet, is often quoted as saying “the markets are a very efficient mechanism for transferring wealth from the impatient to the patient.”

Wealth creation is a long term game. Whatever you do, do not push the panic button!

Author: Matt Hern

Certified Financial Planner professional, Matt Hern has three times been awarded as one of Australia's Top 50 Financial Planners by The Australian Financial Review Smart Investor. He is passionate about guiding you on the right financial choices to achieve what you really want. Matt Hern is an Authorised Representative of Charter Financial Planning Limited AFSL 234665. All information is general advice only.