As the kids go back to school, it is a good time to review the ABCs of successful investing. Expect that stock market selloffs, which are normal, will occur quite regularly – it’s just the nature of beast. But historically the losses have been temporary. Some losses have been greater than others, but the markets have historically generated significant wealth for patient investors.
Why is it that many investors feel the urge to time the stock market? Since 1950, stocks have been in a bull market 83% of the time – despite all the crises and corrections. You would think investors would be happy with that kind of result. But that isn’t the case. Investors spend a lot of time and energy attempting to avoid losses, which ironically, leads to lower long-term performance.
Let’s say your friend came back from the future and shared a glimpse of stock market performance. He said that 3 months from now the stock market will be lower. He didn’t elaborate but hearing that the market would be lower got you concerned.
Investing may be simple in principle, but it isn’t easy in practice. Markets and economies are fraught with uncertainty, constantly changing news and markets, and how great some other investment is performing. Warren Buffett is one of the most successful investors of all time. From time to time he shares sage advice that every investor can benefit from.
Since early last year economists, market experts, and even corporate CEOs were predicting a recession for this year. Most of them said it would happen early in the year.1 A recession was the consensus view among experts, almost a foregone conclusion. With inflation surging to 9% last summer and the Fed aggressively raising interest rates, it was an easy story to sell…and believe.
Last month a bold and concerning prediction showed up in popular social media feeds: “Sell Your Stocks and Move Your Money Before May 2nd, or You May Never Recover”1 Reading such a bold and dreadful prediction can cause investors to get concerned, fearful, and may tempt them to “get to safety” by moving to cash.
This blog shares five market analysis podcasts that are great for educating listeners about what’s going on in today's market.
Mark Twain said, “Never let the truth get in the way of a good story.” It might be more applicable today if he said, “Never let the truth get in the way of a good headline.”
Many investors today unknowingly act like speculators. How do I know this? Because they are more concerned and influenced by short-term stochastic changes in stock prices than in the underlying fundamentals of a company. And when coupled with a barrage of negative news stories, it can be very difficult to act like an investor.
With Financial Literacy Month upon us, it's time to review some basic financial concepts. Here are some tips to help you become more financially confident.