By John F. Wasik, author of Keynes Way to Wealth: Timeless Investment Lessons from the Great Economist
NEW YORK (TheStreet) -- How do you avoid buying at the height of a market or bailing when a stock -- or an entire portfolio -- gets burned? How do you keep the faith when there's trouble at nearly every turn, as was the case in 2008?
I found the answers to these perplexing questions in an unusual place: the portfolios of the great economist John Maynard Keynes. The investment strategies of Keynes showed me some fundamental higher truths. Little did I know that I would find a wealth of investment wisdom in the writings and trades of Keynes, who is far better known for his economic theories.
I actually found solace when I examined Keynes's investment record, which spans two world wars and the Great Depression. Even though I, and millions of others, have weathered brutal markets, we had nothing on Keynes, who was investing money for King's College (Cambridge University), two insurance companies and private accounts for himself and his famous Bloomsbury friends.GM, the Teflon Company Run by a Safety-Loving Mom Goldman Finally Upgrades Netflix, but Is It Too Late? The great economist not only prospered, he did so during one of the worst times in history to invest, along the way pioneering what would later become known as value investing and behavioral economics. When exploring Keynes's investment success, you have to throw out the notion that he hated markets or was a socialist. Keynes was a rabid speculator and active trader. He loved markets. Although he was a harsh critic of capitalism, he kept investing -- and was eventually rewarded. His experience provides solid grounding for stock investors everywhere. In researching and writing Keynes's Way to Wealth, thanks to gracious access granted to me by the King's College archives at Cambridge University, I was able to piece together a mostly unknown side of Keynes that most Keynesian economists -- and financial professionals -- have never seen.