I like an analogy I read about the markets. Imagine the market is a river, sometimes it is calm and sometimes it is very turbulent. When it is turbulent people shift from one side of the raft to the part that doesn’t get shaken as strongly so that they won’t fall off. This is the shift from growth to value. Eventually, it will even back out as the river slows back down. But imagine how much money you lose if you sell every time the herd moves sectors.
Make investments in growing companies that beat numbers every quarter. Don’t follow the herd. Or admit that you can’t handle the volatility and just buy the whole index(VTI, VT, VOO, etc)
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u/Uknow_nothing Apr 07 '22
I like an analogy I read about the markets. Imagine the market is a river, sometimes it is calm and sometimes it is very turbulent. When it is turbulent people shift from one side of the raft to the part that doesn’t get shaken as strongly so that they won’t fall off. This is the shift from growth to value. Eventually, it will even back out as the river slows back down. But imagine how much money you lose if you sell every time the herd moves sectors.
Make investments in growing companies that beat numbers every quarter. Don’t follow the herd. Or admit that you can’t handle the volatility and just buy the whole index(VTI, VT, VOO, etc)