"When others are fearful be greedy"

Redwurzel

Well-known member
Warren Buffet is often seen as the World's most successful investor. And he has been investing for nearly 70 years.

His famous phrase is "when others are greedy be fearful, when others are fearful be greedy"

It feels like a fearful period to me in the last 3 days with the markets thinking the coronavirus will significantly reduce most companies profits in 2020.

I am not saying profits will not be reduced in 2020, but its very likely the World is not coming to an end. People and Businesses delay spending not end it (unless you are unfortunate to die). Interest rates will stay low and Governments will spend slightly more.
 
The tricky bit is knowing when to buy. The value of the FTSE as a total for example will definitely recover and there will be a new all time high. Buy now though and you could see a big drop before the recovery starts. As soon as Coronavirus is declared to be no longer a major concern then the recovery will be rapid.

Some companies might struggle and fall away completely but if you stick to whole market index products then you will do alright. It's picking individual companies that is difficult because there is always a chance the investment ends up at 0. Index investing might be boring and you are looking at a couple of percent here and there but it's the safest way to make above inflation returns in the long run.
 
Mike

Thank you for your post.

There already has been a big drop - general 15%? drop in 2.5 days - biggest 2 day drop since December 2018

One option is to buy a collective fund/trust (with a good long term record) that invests in World pharma/medical/biotech companies that has declined recently. Particularly If someone was already thinking of investing.

The market may drop further, but the logic of Buffet's phrase is to buy when others are fearful. This is the most fearful I have seen for a good while.
 
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