The press continues to encourage investors to watch what the institutional and hedge fund managers are doing as an indicator for what they should do. And because they are selling, so should the investor. This is foolish advice, because institutional managers, during the extremes of the market, are never doing what they personally want to do. Because of redemptions during crashes and infusions of new money during rallies they are forced to liquidate or invest against their own best judgment Investing is counter intuitive. One of the great counter intuitive investors is Warren Buffett. Read his letter to the New York Times here.
Forwarding this letter to clients might be a good way to comfort them in these difficult times.