I often wish that the world of shares could be as flat as the Karoo, so that we could look into the future – not just a day or two ahead, but years into the future, to see the levels at which shares would be trading by then. Wouldn’t that make investment management so much easier? Unfortunately, we don’t know what share prices will be tomorrow or next year, so we have to rely on other tools.
Not unlike with investment opinions, investors often also disagree about the best strategy to follow when buying and selling shares. Some investors prefer to look at the market through a telescope so they can see well into the future, and they don’t mind buying shares and waiting patiently for good returns. Their reasons for buying shares are not speculative in nature and they aren’t worried about short-term market fluctuations.
Other investors prefer to look at the market under a microscope and they believe that trading very actively holds the key to good returns. Shares are bought with the intention of generating quick returns and this type of investor’s main goal is to outperform the market over the long term.
Following the past 18 months’ turbulent market performance, I have decided to look at the market in both ways – through a telescope and under a microscope.
The telescope investor
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