Financial Advice From Man Who Made $1+ Billion in 1929 – Importance Of Being Patient and “Sitting”

Editor Mark O’Byrne

– Listen to Jesse Livermore and ignore the noise of short term market movements, central bank waffle and daily headlines
– Stock and bond markets are overvalued but continue to climb… for now
– What goes up must come down and investors should diversify and rebalance portfolios despite market noise
– Behavioural biases currently drive markets, prompting legendary investors to be confused and opt out
– Lesson is to prepare portfolios for long-term and invest in assets that will act as hedge in next market correction or crash
– Gold performs well over the long-term and delivers to those “sitting” and being patient

When it comes to your investment portfolio it is harder than ever to sift through market and central bank noise and focus on the fundamental drivers and long-term strategy.

Take for example a quick glance at financial news pages this morning:

A story about bitcoin’s rise from $200 in 2013 to $5000 just three weeks ago – a gain of 2,400%
Fed rate hike odds in December have soared to 78% thanks to Yellen’s “noisy” comments yesterday
Luxury homes in London’s best neighborhoods are set to rise by 20.3% over next five years – allegedly
Warnings of supply gap in oil production next year

Meanwhile, we look at more quiet, conservative gold and it has varied no more than $200/oz over the last four years.

It can be difficult to correlate this with a background of markets that are teeming with behavioural biases. Market reactions are short-tempered thanks to this age of instant information… and disinformation.

Greed and fear become more exaggerated than ever and greed is currently dominant.

The most recent individual to get frustrated with this state of affairs is money manager Hugh Hendry. Hendry recently decided to close his hedge fund, after 15 years. Hendry joined the likes of Eric Mindich, Leland Lim and John Burbank all of whom have shuttered hedge funds this year.