The recent downturn has brought a renewed sense of pessimism to our country and the world. With the lack of leadership from Washington as well as corporate America. Many would say we need some adult leadership.
I do know this is not a time for panic.
There have been some who told me that ‘buy and hold’ is dead. My response is that ‘buy and hold’ should never have existed. Rather we must ‘buy and rebalance’. By rebalancing we are in effect buying low and selling high. Automatically, because it’s part of the process.
As long term investors we must ignore the media and remain diligent to our process and strategy. We must ignore short term volatility and focus on our long term goals.
In the coming weeks we will hear from the ‘gurus’ that ‘I told you so’…’you should have sold equities and bought gold (or whatever)’. They will say it’s not too late because the market will continue down. Each ‘expert’ will offer a solution to what is going on ‘right now’. Invariably they will all say ‘this time is different’.
There will always be predictions that come true, unfortunately we do not know which predictors are right going forward. If you have enough predictors someone is bound to be right. This ‘correct’ forecast is a matter of luck and not skill. And unfortunately the success is seldom repeated.
Successful investing involves finding a prudent process. A process backed by academic and scientific evidence. Because we are emotional beings during market extremes both down and up. We need the help of a coach to keep us disciplined to our process. (OK that could be called self-serving).
Keep in mind the financial media will continue to fuel our fear as well as feed the hype. The result is continual trading. Which in turn allows Wall Street to continue to collect high fees.
They will continue to entice us to market time, stock pick or hire the money manager with a high return over the short term. Because these activities facilitate excessive trading.
Instead of focusing on the daily stock market quotes. We need to focus on what made our country great. Our country is going through some tough times right now however I continue to believe in America and I always will.
The jobs report just came out and we added less jobs than expected. This confuses me because regardless of where I go there are help wanted signs. Some even appear to be permanent signs.
We must stop pointing fingers and get back to work. The free markets will work if we let them.
Continue on with our long term goals own equities…globally diversify…rebalance.