You see, owning stocks requires a CEO mindset – you don’t close up shop because of short term stock market setbacks. You need to see the bigger picture and have confidence that the stocks you own will be around for the long term. However, investors are often told to hang in there because of a vague and frankly outdated argument that stocks outperform in the long run. Don’t tell that to people who over the last 10 years find themselves in the same place where they started.
Not all stocks will outperform the market, but only the high quality ones. Knowing the specifics – what the companies are doing, creating, selling to make themselves stronger and more competitive during the short term setbacks – will save you from selling into a sea of red. There’ll be more labor days to come before the next official one rolls around, and there’ll be more down days as the economy recovers. Just remember – not all stocks are created equal and whether you’re a CEO or investor, conviction comes from knowing what’s going on under the hood.