The Healthy Optimist

To be successful, investors need an attitude of healthy optimism.

This idea is based on simple logic which is backed by evidence. Securities have delivered positive returns in the past and it’s reasonable to expect that they will continue to post positive returns in the future. However, it is not reasonable to expect returns to be positive every day. We should expect good days and bad days, with the average being good.

And because we don’t know which days will be good or bad, we should act as though all days will be good because we can’t predict them and don’t want to miss them when they occur.

This attitude is helpful both when markets are high, because it reminds us that they can go higher, and equally when markets have fallen, for exactly the same reason.