BE FEARFUL WHEN OTHERS ARE GREEDY, AND BE GREEDY WHEN OTHERS ARE FEARFUL!

In 2007/2008 I will never forget everybody was concerned and desperate, including me. That was a real scary period of investors. Seemed that here is the time the collapse of Capitalism. I know one guy who was contrarian and started to buy in the dips.

Yes, he is W. Buffet.

He bought stocks for his personal account. Many of us did not follow him. He said in 2008 “A simple rule dictates my buying: Be fearful when others are greedy, and be greedy when others are fearful,” ... “And most certainly, fear is now widespread, gripping even seasoned investors.” And he was absolutely right about the fear. Most of us were fearful and paralyzed to buy anything.

Since that time the DJIA has gained with 88% and is on new historical high, the SP500 has doubled and it is on new records too. When Buffet recommended to everybody buying most of us left the market for many years and just now starting to get back. The typical average american investor keeps their 48% money still in cash and just 18% in stocks.

And what is the common sentiment now? There is a feeling of „We missed the rally” and recently and slowly the investors get back into the market. American investors so far this year have invested $106 billion into equity funds.

My lesson from that story is the following. Be contrarian. Buy when everybody sells and sell when everybody buys. That is the art of the investment.

Take a look at our Swiss fund and begin to invest with us!

The BFM Assets Team.