I have a friend in the investment business who often refers to himself as a contrarian. He observes many, if not most, investors become emotional about their decisions, and lacking the discipline to stick to their plan they succumb to the “group think” of the masses. He believes it’s important to stick with your long-term plan especially when you see the multitudes moving money between investment classes that is contrary to to your long-term plan. This usually occurs when short-term events cause emotional distress. He somewhat jokingly quips that when he witnesses this type of unjustified, emotional mass-movement it’s often fruitful to move in the other direction. I believe he is right.
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