The investment world loves its pithy sayings. From "Sell in May and Go Away" to "Buy Low, Sell High," these catchphrases roll off tongues in boardrooms and backyard barbecues alike.
But here's the uncomfortable truth: most of these market maxims are financial fairy tales that can lead investors astray when they need guidance most.
Take the infamous "Sell in May" rule. This seasonal trading strategy suggests investors should exit the market in May and return in November, based on historical patterns showing weaker northern hemisphere summer performance. Yet as May 2025 demonstrated with the S&P 500's strongest showing in over three decades, following this folklore would have cost investors significantly.
The phrase persists not because it works, but because it's memorable—and memorability often trumps accuracy in financial advice.
The Catchphrases That Catch You Out
"Buy the Dip" sounds sensible until you're catching a falling knife.
This phrase encourages investors to purchase assets when prices decline, but it fails to distinguish between temporary corrections and fundamental deterioration. The 2000-2002 tech crash perfectly illustrates this trap.
As the NASDAQ plunged from its peak, countless investors "bought the dip" in companies like Pets.com and Webvan, thinking they were getting bargains. Each 20% decline seemed like an opportunity—until these companies ceased to exist entirely. The phrase assumes every decline is temporary, ignoring that some assets fall because they're genuinely worthless.
"Buy the Market" appears safer through broad diversification, but this catchphrase can mask concentrated sector risk. New Zealand's finance company collapse of 2006-2008 perfectly illustrates this danger.
At the peak, 37 finance companies advertised in the Sunday papers each weekend, offering attractive fixed-income returns. Investors following this logic might have spread their money across these institutions, thinking diversification provided safety. Instead, they were diversifying across a systemically flawed and highly corelated sector. When the music stopped, nearly all collapsed, wiping out billions in investor funds. The broader share market's performance was irrelevant.
"Time in the Market Beats Timing the Market" appears sage until market conditions shift dramatically.
While long-term investing generally outperforms frequent trading, this catchphrase can discourage necessary portfolio adjustments during significant economic shifts or life changes. A 30-year-old and a 65-year-old shouldn't follow identical strategies, regardless of what the saying suggests.
"Don't Put All Your Eggs in One Basket" promotes diversification but ignores concentration's power when applied intelligently. Warren Buffett built his fortune through concentrated investments in businesses he understood deeply, not through broad diversification. The phrase oversimplifies risk management into a one-size-fits-all solution.
The Phrases That Actually Guide
Some investment principles, however, deserve their staying power because they reflect fundamental market truths rather than seasonal superstitions.
"You Can't Go Wrong with Bricks and Mortar" captures real estate's enduring appeal, though like any investment mantra, it requires nuanced application.
Property ownership offers tangible assets, inflation protection, and steady cash flows through rental income. Unlike paper assets that can vanish overnight, real estate provides shelter—a basic human need that doesn't disappear during market volatility.
This doesn't mean every property purchase is prudent. Location, timing, and personal circumstances matter enormously. But the underlying principle—investing in assets that provide essential services or meet basic needs—remains sound across economic cycles.
"No One Ever Made Money Selling Too Early" acknowledges that perfect timing is impossible and that securing profits often trumps maximising theoretical gains. This phrase encourages investors to take money off the table when positions have performed well, rather than holding indefinitely hoping for even greater returns.
"They're Not Making Any More Land" reflects scarcity economics in its purest form. While this saying has driven countless real estate bubbles, the underlying truth remains: prime locations have finite supply, and growing populations create ongoing demand pressure.
The Discipline Behind the Dollars
The most dangerous catchphrases share common characteristics:
They oversimplify complex decisions
They ignore individual circumstances
They promise easy solutions to difficult problems.
They persist because humans crave simple rules in an uncertain world, but markets reward those who embrace complexity rather than avoid it.
Effective investing requires discipline that transcends catchy phrases. This means conducting thorough research before making investment decisions, understanding your risk tolerance and time horizon, and maintaining consistent strategies regardless of market sentiment. It means recognising that what works for one investor may not work for another, and that market conditions change in ways that static rules cannot accommodate.
Structure Over Slogans
Rather than relying on catchphrases, successful investors develop structured approaches tailored to their specific situations. This includes regular portfolio reviews, systematic rebalancing, and clear criteria for making buy and sell decisions. It means understanding the difference between temporary market volatility and fundamental shifts that require strategy adjustments.
The structure also involves acknowledging what you don't know. Markets are complex systems influenced by countless variables, from geopolitical events to technological disruptions to demographic shifts. No catchphrase can capture this complexity or provide guidance for every scenario.
The Long View
Markets reward patience and penalise prediction. While "Sell in May" failed spectacularly in 2025, it will inevitably align with market movements in some years, reinforcing believers' confidence in its predictive power. This creates a dangerous cycle where occasional correlation gets mistaken for causation.
The investors who build lasting wealth focus on fundamentals rather than folklore. They understand that markets move on their own rhythm, driven by earnings growth, economic conditions, and investor sentiment—not calendar dates or catchy sayings.
Instead of searching for the perfect catchphrase, focus on building a perfect process. Markets don't care about your slogans, but they handsomely reward discipline, patience, and the wisdom to ignore the noise.
This is where a fiduciary-based adviser becomes invaluable. Unlike commission-driven salespeople peddling the latest investment fad, a true fiduciary provides wisdom grounded in evidence, not emotion. They'll challenge your assumptions, question popular narratives, and guide you toward strategies backed by research rather than folklore. When everyone else is chasing catchphrases, fiduciary advice keeps you anchored to what actually works.
Nick Stewart (Ngāi Tahu, Ngāti Huirapa, Ngāti Māmoe, Ngāti Waitaha) is a Financial Adviser and CEO at Stewart Group, a Hawke's Bay and Wellington based CEFEX & BCorp certified financial planning and advisory firm. Stewart Group provides personal fiduciary services, Wealth Management, Risk Insurance & KiwiSaver scheme solutions. Article no. 412.
The information provided, or any opinions expressed in this article, are of a general nature only and should not be construed or relied on as a recommendation to invest in a financial product or class of financial products. You should seek financial advice specific to your circumstances from a Financial Adviser before making any financial decisions. A disclosure statement can be obtained free of charge by calling 0800 878 961 or visit our website, www.stewartgroup.co.nz
