Save, Patience and Resisting the Chase

We strongly feel that investors can enhance their long-term returns by avoiding three common mistakes:

1. Not Saving Enough – Most people spend too much and set aside too little to invest.  Try to save a good portion of your income each year to build up wealth.
2. Having Unrealistic Expectations on Market Returns – Most people expect the markets to deliver more than is plausible. In a world of low yields, long-term returns will probably be below historical averages. You must be patient.
3. Chasing Past Success – Investments, unlike normal goods, become more popular when their prices rise and less popular when their prices fall.  We suggest that you rebalance into areas that are cheap and take profits on those that have become expensive.

Real wealth is built by being disciplined.