As we venture into what has been one of the historically most difficult times of the year, remember to control your emotions and not let short term events cloud your long term perspective.
While many individual investors think that institutional money has huge advantages over them, I would argue that individuals have much more powerful advantages.
Institutional investors are subject to behavioral biases just as individuals. Why...because they are run by people. The herd effect is huge. Institutions are just as subject to unrealistic expectations of their investors and money can leave as fast as it comes. This makes money managers "as nervous as a long tailed cat in a room of rocking chairs".
What often happens is institutional managers, get nervous, forget fundamentals, and focus on the crowds perspective (the market's perception). This results in significant oversold and overbought conditions! This is where the individual can shine.
The individual doesn't have to manage several, tens or hundreds of expectations. They only have to control their own behavioral biases. While not an easy task for a single person, it is an exponential function doing in with many clients in a portfolio.
Keep your head and keep long term focused!
