Three years ago I discussed the crisis in Greece. My commentary is as follows.
The news today focuses on Greece and their difficulties in forming a new government.
- It would appear no one in Greece has the courage to do what needs to be done.
- Greece is allowing public outcries to determine their fate.
- Emotional decisions are seldom the right ones.
- The world and the stock traders are watching.
- As always Wall Street does not like uncertainty.
The nightly news, daily stock market shows, and cable news focus on variability to get your attention. They bombard you with the equivalent of “noise”. Short-run data and statistics that are useless. Paying attention to the short-term market fluctuations and newspaper headlines will completely disintegrate your peace of mind and ultimately your portfolio.
Today Greece is again in the news. They will be unable to meet their financial obligations. The equity markets around the world, with a few exceptions, have responded with downturns. Without becoming too political here is a quote from Margaret Thatcher, past Prime Minister of England.
“The problem with socialism is that eventually you run out of other people’s money.”
This is another example of short term volatility. As I mentioned earlier Wall Street and equity markets around the world do not like uncertainty.
Many will use this as a reason not to invest their money in the equity markets.
This is the reason many prefer investing in real estate because there are no noticeable short-term fluctuations in price. You cannot look up the value of your real estate property on a daily basis. You treat it like a long term investment, which it is. Keep in mind the value of your real estate fluctuates just like the equity markets. The difference is you never see the volatility.
The stock market should be treated much the same, by ignoring short term volatility and the daily news reports. By following a prudent process and strategy with your investments you will succeed in the long run. Stop trying to control something you cannot control.
To succeed in investing for the long run you must own equities….globally diversify…..rebalance.
This is best accomplished with the guidance of an investor coach/fiduciary adviser. Your coach will help you build YOUR prudent portfolio. Followed by ongoing education and coaching.
Investors left on their own will make emotional decisions. Selling during times of down markets, ie, panicking. Your coach will help you remain disciplined to your strategy.
Patience and discipline are your friends when you are investing for your financial future.
Someone may offer you what appears to be a very cheap portfolio. But without the help of an investor coach you will succumb to your emotions and make bad decisions with your money. Whether it is Greece or some other crisis.
Answer to last week’s question: gardening