Sentiment and emotion play a huge role in the short-term pricing of equity markets. However, the way to compound returns in equities over the long run is to invest with a margin of safety, in companies that consistently grow their earnings and dividends
As the British-born American investor, economist, and professor (widely known as the "father of value investing"), Benjamin Graham said, in the short run, the equity market is a voting machine but in the long run, it’s a weighing machine. That remains accurate today.
The hardest aspect of investing is remaining patient and unemotional. It’s hard to retain discipline when you see others making money in stocks you don’t own and sectors you don’t understand.