Sorry, everyone, but Real Money Columnist Paul Price has a bit of tough love headed your way.
“The little guy,” he wrote recently, “is almost always wrong. When they yank money out of equities you should be doing the opposite.”
This is the start of one of the most classic pieces of investment advice, one which traces back to Warren Buffet himself. This wisdom advises that investors should trade counter-cyclically to the market. When everyone buys, it’s time to sell. When everyone sells, that’s the best time to buy.
This may be common wisdom but clichés are clichés for a reason.
Here, many investors will follow the crowd. In some cases, their strategies are too short term. They count their profits in terms of days (if not hours) and have built portfolios that can’t wait until the market recovers its value or starts selling cheap.
In other cases, investors simply act on…
