It’s been more than a roller coaster ride lately, as the US stock market declines one day and rises the next, dips again the next day and soars up again the next. As an investor our fear and greed buttons are taunted daily as we decide whether to buy or sell, and sometimes these decisions do not work out in our favor.
Bridgewater Associates founder and multi-billionaire, Ray Dalio, shares some of his knowledge on investing at the Harvard Kennedy School’s Institute of Politics. “You’ve got to do the opposite,” Dalio said. “It’s when you’re not scared you probably want to sell, and when you are scared you probably want to buy. The greatest mistake of the individual investor is to think that a market that did well is a good market rather than a more expensive market. And that a market that did badly is a worse market … rather than a cheaper market,” he explained.
Dalio urges investors to create a balanced, diversified portfolio and hold steady, making sure not to try to anticipate or react to market moves at all. Keep those emotions and trigger fingers in check.
Bridgewater manages a portfolio of $160 billion and spends hundreds of millions a year to gain knowledge and get the advantage on their market moves.
To watch the whole interview, click here.