Warren Buffett has stated that all you need to know for profitable long term investing is in chapters 8 and 20 of Benjamin Graham’s The Intelligent Investor.
Chapter 8 is titled “The Investor and Market Fluctuations,” which is something we are all always intrigued by. The key is to prepare both financially and psychologically for market fluctuations.
Market Fluctuations As A Guide To Investment Decisions – Timing Vs. Pricing
Graham distinguishes between two ways of taking advantage of market fluctuations: you can time the market or you can price it. Timing assumes you predict where the stock market will go next, while pricing makes you look for stocks trading below their fair value. More →