(The following article appeared as the editor's note in the latest 'Your Money', iafrica.com's weekly personal finance and property newsletter. Click here to subscribe. The newsletter is absolutely free and you can opt out at any time ? you have everything to gain and nothing to lose!)

Plummeting markets terrify us into selling our shares for peanuts so we can switch to the 'safety' of cash (click to see how risky it is to avoid 'risk'). Once they've recovered we pile back into equities, even though by this time they're not cheap anymore.

We buy high and sell low ? the exact opposite of what makes rational sense.

When the market was at its bottom in March, instead of buying like crazy, South Africans clamoured for their funds to be invested in the money market. According to the Association of Savings and Investments South Africa (ASISA), it was only in the third quarter of the year that investments started flowing back into equities. Problem is, by that time shares had recovered by 34.5 percent.

We're poor investors because we trade on sentiment. We're also way too conservative.

According to ASISA, the quarter ending 30 September 2009 was only the third period in five years during which money markets recorded net outflows.

This shows that many long-term investors are in cash (with no chance of comfortably beating inflation) when they should be in equities.

If you're a long-term investor (minimum five years, but probably seven to ten years or more), here is how you will achieve investment success:

• Diligently and consistently invest in shares throughout the highs and lows of the market. Read 'Rand cost Averaging' to see what I mean.

• Don't get anxious when the market drops. Any loss you suffer only becomes 'real' when you sell, so a falling market should not bother you at all. In fact, you should be happy when it falls as you are a buyer, not a seller.

• Don't get greedy when the market is booming. Again, read 'Rand cost Averaging' to see how you can avoid this common pitfall.

• Not even the best fund managers consistently time the market correctly, so don't even try. 'It's not market timing, but time in the market that makes one rich' are words to live by. Read 'Shares: safe and sound' to learn how extremely safe shares are over the long-term and 'The power to become rich' to see how compound interest works.

• Know that the money market is not a safe long-term investment. In fact, there's a 100 percent chance of failure.

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