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3 Useful Investment Quotes for 2016

Does it feel like stormy weather in the investing seas will appear for 2016?

It could be, if we looked at what happened to the Straits Times Index (SGX: ^STI) in 2015 – it fell by 14.5%.

Oil companies like Keppel Corporation Limited (SGX: BN4) and Sembcorp Marine Ltd (SGX: S51) did worse – falling oil prices had led to lower profits in the two companies, in turn resulting in bigger share price declines for them than the Straits Times Index had experienced during the year.

And then, we had the U.S. Federal Reserve’s interest rate hike in mid-December, the first time the central bank had done so in nearly a decade.

In short, dark clouds appear to be gathering. To help deal with that, here are three smart quotes that might be useful:

1. Quote from John A. Shedd: “A ship in harbor is safe, but that is not what ships are made for”click here for more

2. Quote from Boris Spassky: “I still look at chess with the eyes of a child”click here for more

3. Quote from Scott Adams: “When it comes to any big and complicated question, humility is the only sensible point of view”

Dilbert cartoonist Scott Adams has a great suggestion for dealing with complex problems that can be very applicable for investing.

When we invest, the evaluation of companies or industries can sometimes be complicated.

Take oil prices for instance. Conventional wisdom suggests that the price of oil is all about demand and supply. But, demand could be affected by trends like the rising efficiency of petrol-consuming vehicles and the growing heft of solar energy. Meanwhile, the Organisation of the Petroleum Exporting Countries (OPEC) has a strong say on the supply side. When you string together the different moving pieces, complicated might be an understatement.

This is where humility comes into play.

Humility might mean that we accept that we could be wrong on some of our investment decision-making; this could lead to us demanding a larger margin of safety when we invest. Humility could mean that we diversify our investment holdings into different sectors. Humility may also lead some of us to accept that we don’t know much about the oil & gas industry and thus avoid it all together.

Foolish takeaway

Investing in 2016 (or another year for the matter) will see investors having to deal with big hairy problems and uncertainties. In tackling such problems, keep Adam’s wise words in mind.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Chin Hui Leong doesn’t own shares in any companies mentioned.