The true investor welcomes volatility. A widely fluctuating market means irrationally low prices will periodically be attached to solid businesses. This can apply to individual stocks or the whole market.

It can take considerable willpower to ignore the market’s herd mentality and behave rationally. To keep your head when others are losing theirs. But if you truly want to be a successful investor, you must embrace these two simple truths. First, the market is there to serve you, not instruct you. It just sets prices. If the price is silly, you take advantage of it.

Second, day-to-day (or even monthly or yearly) fluctuations in the stock market do not make you richer or poorer. Only changes in a business’ intrinsic value can actually do that.

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