It all begins with the fear of the unknown. Fear of the Future. It is one of our most basic instincts, to fear the unknowable. This attribute keeps us alert for changes in the environment that could threaten our safety and well being.
It is the drive that keeps us plugged into the evening news and makes us ask many unanswerable questions, such as, “Will there be enough money to maintain my standard of living? What is the economy going to do next? Will I be able to keep my job?” or “What is the market going to do next?”
The news media often preys on this fear by showing clips of tragic events and doom and gloom predictions about the future. The newsroom motto is….If it bleeds it leads. Disaster sells.
It is not uncommon for this pervasive fear to cause stress, anxiety, and even sleepless nights. It is a chronic affliction in our modern age.
Many of us see downturns of the past as buying opportunities, yet we see downturns of the future as risk. Why is this? Is it our innate fear of the future?
Since 1926 the S&P 500 has realized a nearly 10% return. During this time there have been downturns of 10% or more 90 times. So to earn the great long term return you need to deal with the downturns.
There is really no need to fear the future. Because we fear the unknown. If it’s unknown why try to predict it?
To successfully invest for our future, we must ignore the media hype and stay the course. Traders seldom succeed in the long run, investors will prevail if they remain disciplined.
Do not fear the future… own equities….globally diversify …rebalance.