Markets are Random …..Get Over It!!

I recently read an article that many Americans continue to be afraid of stocks. They are afraid they will lose all their money.

Many expect to earn stock market returns with treasury bill risk.

Just heard a new prediction. On August 1 of this year the market will crash. The reason is a little unclear.  Regardless, these predictions are baseless and of no real value to investors.

Many believe there is someone out there who can and does know when to get in and out of the market to maximize return and avoid all losses.  After two decades of research I can tell you this person does not exist.

Occasionally, you will find someone who makes a correct prediction. The problem is there is no evidence that their predictions will be correct going forward.

When you invest in stock markets no one can predict “save” you from the down periods—NO ONE.  If markets were not random and unpredictable, they wouldn’t offer higher expected returns.  Markets randomly and unpredictably go up and down.

As we age our situation gradually changes from growing our money to taking an income stream that keeps up with inflation.

To succeed in this we must reduce the level of risk in our portfolio as we grow older.

We must focus on the long term.  Our research is based on long term performance data. Making decisions based on short term results will lead to disappointment.

We will succeed in our investing when we own equities, globally diversify and rebalance.

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