Daniel Kahneman Quotes

Index investing outperforms active management year after year.

I had some airline stock, but the airlines tanked. I didn't have a lot of money in them, though.

If you can predict where the market's going, just do what you can predict. If you can't, which is the presumption of dollar cost averaging or time cost averaging, either one, then you're trying to ease in. But if the market rises more than it falls most of the time, easing in is, by definition, a loser's game.

Here is a dirty little secret: Stock-picking is wildly overrated. Sure, it makes for great cocktail party chatter, and what is more fun than delving into a company's new products? But the truth is that individual stocks are riskier than broad indices.

My advice to the average investor in 1988 is to be patient and think long-term. It will take 18 months for confidence to get better and, in the meantime, this is absolutely no place for short-term money.

Investing is a business where you can look very silly for a long period of time before you are proven right.

The philosophy to 'buy and hold' is a philosophy that I use to manage funds.

I'm sometimes accused of being hostile to mutual funds. That's not fair, really. There is a place for them. Still, I am hostile to one thing, which is trying to use funds to time your way in and out of the market. That's a recipe for very bad results.

There's no statistical evidence that human beings have an ability to move in and out of the markets effectively. It's next to impossible.

I never attempt to make money on the stock market. I buy on the assumption that they could close the market the next day and not reopen it for five years.

I haven't changed any of my investments since I've been in the Senate and haven't purchased any stocks since I've been in the Senate.

There is almost no limit to the ability of investors to ignore the lessons of the past.

Regardless of what happens in the markets, stick to your investment program. Changing your strategy at the wrong time can be the single most devastating mistake you can make as an investor.

In the financial markets, hindsight is forever 20/20, but foresight is legally blind. And thus, for most investors, market timing is a practical and emotional impossibility.

Mutual funds are an overrated investment heavily promoted by Wall Street.

You could lose hundreds or thousands one day on paper and gain it all back the next, and it has literally no effect on your immediate future, provided the money you have in the market is money you're investing for the long haul (meaning at least three to five years).

Most people might just as well buy a share of the whole market, which pools all the information, than delude themselves into thinking they know something the market doesn't.

Always keep your portfolio and your risk at your own individual comfortable sleeping point.

If your investing approach requires that you become Nostradamus to succeed, then you are destined to fail.

There's a tendency to look at investments in isolation. Investors focus on the risk of individual securities.

I'm not a money manager, but I can tell you what the conventional wisdom is. The younger you are, the more risk you can take on.

Mutual funds give people the sense that they're investing with the big boys and that they're really not at a disadvantage entering the stock market.

The thing to do with mutual funds is to buy a couple of decent ones, set up an investment plan and then never, ever think about them again, except maybe once a quarter or so when you take a peek at your statements to make sure that you have not accidentally been buying the Fidelity Peace-in-the-Middle-East fund.

Do not buy the hype from Wall St. and the press that stocks always go up. There are long periods when stocks do nothing and other investments are better.

It is important for investors to understand what they do and don't know. Learn to recognize that you cannot possibly know what is going to happen in the future, and any investment plan that is dependent on accurately forecasting where markets will be next year is doomed to failure.