Good investors must learn to contextualize the daily background noise.

Yearly data put the rest of the noise into perspective. Most of the weekly or monthly random up-and-down movements get smoothed out. Ultimately, this is where long-term investors should be focused.

The good news is that economists are intelligent, engaging and often charming folks. The bad news is their work is often of little use to investors.

Rather than engage in the sort of selective retention that so many investors tend to do and pretend mistakes never happened, I prefer to 'own' them. This allows me to learn from them and, with any luck, avoid making the same errors again.

It is important for investors to understand what they do and don't know. Learn to recognize that you cannot possibly know what is going to happen in the future, and any investment plan that is dependent on accurately forecasting where markets will be next year is doomed to failure.

In the investment business, you must expect to be wrong.