Markets around the world continue to grind higher with the S&P/ASX 200 Index (Index: ^AXJO) (ASX: XJO) touching a new 52-week high last week of 5,561. Meanwhile, the Dow Jones not only hit a new one-year high last week but it also hit a new all-time record high.
Interestingly, while stock markets continue to rally, debate rages as to just what will happen next. Some economists believe the rally has been built on a house of cards, while others see the gains as sustainable. Investors are also divided; some see valuations as stretched and a correction looming, others believe stocks may be near full value, but justifiably so.
It's easy to get caught up in all the financial debate and discussion, however this rarely improves returns. Rather, having the ability to remain level-headed and put facts into their proper context – this is what smart investors do.
That's why smart investors see a buying opportunity ahead – not just right now, not just if or when a correction comes, but always! Yes, that's right – smart investors believe there will always be buying opportunities ahead! They know that in the long-run economies will muddle through all kinds of obstacles and exit challenges, which appeared insurmountable at the time.
That's why smart investors use price weakness to buy more shares in good quality companies. Sure they could have tried to trade in-and-out of Ramsay Health Care Limited (ASX: RHC), CSL Limited (ASX: CSL) and Commonwealth Bank of Australia (ASX: CBA) on multiple occasions over the last decade, but do you think they would have improved on the 712%, 789% and 154% share price appreciation that buy-and-hold investors enjoyed? I seriously doubt it!
