Words of Wisdom: What Investment Sayings Still Hold True?

We all love a good saying;  a nugget of wisdom that seems to sum up the world in a few words. The investment world is full of them. From “cash is king” to “buy low, sell high,” there’s no shortage of proverbs that get passed around by investors and fund managers alike.

Recent research by Legal & General recently decided to put some of these sayings to the test.

Their research reviewed a dozen of the best-known sayings, scoring each for durability, reliability and insight. The result? Some classics still offer timeless guidance, while others are better left to history.

We have been taking a look at what they found.

The Champion: “Don’t put all your eggs in one basket”

Taking the gold medal in L&G’s study is perhaps the oldest and most reliable saying of them all. The phrase can be traced as far back as Don Quixote in 1605 – and it still rings true today.

In investment terms, it’s all about diversification: spreading your money across different asset classes, regions and sectors to avoid being over-exposed to any one risk. L&G’s analysis found that a well-diversified global portfolio dramatically reduces the chance of large losses compared with investing in a single asset.

Of course, diversification isn’t a magic shield. L&G rightly reminds us that “diversification is no guarantee against a loss in a declining market.” But it can smooth out the ups and downs, reducing the impact of individual market shocks.

This saying will be familiar to many Beechwood clients, as it is central to our investment approach of building balanced and well diversified portfolios.

It’s tempting to chase the top-performing sector or latest market trend, but concentrating all your wealth in one area can leave you exposed when conditions change. A mix of funds, sectors and assets can help you stay the course.

Silver Medal: “Time in the market beats timing the market”

This phrase might be less poetic, but it earns near-top marks for reliability and insight. The idea is that staying invested for the long term is far more powerful than trying to predict short-term market movements.

The research highlights that those who miss just a handful of the market’s “best days” end up with far lower returns. What’s often forgotten is that the best and worst days tend to occur close together – usually in periods of high volatility. Trying to skip the bad days without also missing the good ones is virtually impossible.

Rather than attempting to time every rise and fall, the lesson is to stay invested. Markets will fluctuate, but over the long run, patient investors tend to be rewarded through compounding growth and the gradual upward rise of global economies.

Bronze: “Be fearful when others are greedy”

Warren Buffett’s most famous maxim takes third place. It captures the value of contrarian thinking – being cautious when optimism is excessive, and bold when fear dominates.

The research found good evidence that buying when sentiment is poor can be profitable. For instance, periods when investors are overwhelmingly negative have historically been followed by strong one-year returns. The message is that Investor emotions often overshoot reality, creating opportunities for those who keep a cool head.

Of course, going against the crowd isn’t always comfortable. Markets can stay exuberant or fearful longer than seems logical. But a well-diversified, disciplined approach helps investors avoid extremes – another reason why diversification and time in the market are such recurring themes.

The Rest of the Field

Not all sayings fared as well under scrutiny. “Cash is king,” for instance, scored poorly on reliability. Over the long run, cash has failed to keep up with inflation, meaning its real purchasing power tends to shrink. That said, holding some cash for liquidity and flexibility still makes sense, but its better not to let too much of your portfolio sit in unproductive accounts.

“Buy low, sell high” sounds sensible, but is easier said than done. It assumes investors can identify peaks and troughs in real time, which is rarely possible. “The trend is your friend” has merit for professional traders, but for long-term investors, chasing trends can backfire.

Meanwhile, “Sell in May and go away” – the old City of London seasonal saying – earned one of the lowest scores. Any seasonal patterns in returns are inconsistent and largely irrelevant in today’s global markets.

And finally, a few more modern entries like “You can’t eat a relative sandwich” (a tongue-in-cheek critique of focusing on performance relative to benchmarks rather than real outcomes) remind us that investing isn’t about beating an index; it’s about achieving your personal goals.

A Final Word

Markets are unpredictable, and no single saying captures the full complexity of investing. But as L&G’s team shows, some old pieces of wisdom really do endure. The art of successful investing lies not in finding the perfect moment to act, but in sticking with a sensible, diversified plan over time.

As always, if you would like to discuss your investment planning in greater detail, speak to your Beechwood adviser.

Please note that this article is not a recommendation and is not intended as financial advice. 

This article draws on research from Legal & General Investment Management’s “Q3 2025 Asset Allocation Research: Do Famous Investment Sayings Hold Water?”