Many investors have told me their advisor recommends large cap stocks only because of their stellar return as of late. They were told avoid small stocks because interest rates are going up. This market timing plays to the greed of investors and advisers as well. These advisers will use any ‘trick’ to make investors move their money to them.
As explained below Greed kills. Because right now small stocks are out performing large stocks. When this will change I have no idea.
What needs to be understood is the equity markets are random and unpredictable.
Below is an article by Fred Taylor that helps us understand why Greed Kills your investment returns.
Perhaps the greatest coach of all time in any sport, John Wooden (UCLA Basketball for those unfamiliar), had many simple rules for success not only on the basketball court but life as well. In this regard, one of his rules for success and life was: “be quick but don’t hurry!” This certainly applies to investing where discipline and patience are absolute requirements for long-term success as an investor. Don’t be in a hurry for investment “success.” Follow the advice of one of the greatest investors of all time: John Templeton — “get rich slowly!”
BTW, investment fear ain’t too good either!!
To avoid killing your returns you need to own equities with the correct amount of high quality short term fixed income….remain globally diversified….and rebalance.