“As Lynch noted, humans are emotional creatures, and we can get particularly emotional when our money is involved,” writes Reese. “When our stocks or the broader market start declining, or a strategy stops working in the short-term, the wait for a rebound can seem interminable. Every bone in your body will be telling you to sell, sell, sell, that if you stick with your approach, you’ll lose it all — your retirement money, your kids’ college tuition, you name it.”
“But,” he continues, “if you have studied and learned from great strategists like Lynch and [Joel] Greenblatt, and you’ve examined research showing how poor market-timing decisions crush many investors’ portfolios over the long haul, you can stay calm during such difficult periods.”
That, Reese says, is why he’s sticking with a couple of his worst-performing strategies so far in 2014 — his Motley Fool and Martin Zweig-based approaches. Both have stellar long term track records, and Reese says he expects them to rebound strongly. He looks at a handful of picks from these models, including Anika Therapeutics — a favorite of both.