OMG….Should You Get Out of The Equity Markets?

The Wall Street bullies are continually looking for ways to keep investors trading. This is another way of saying market timing. Which is predicting when to get into and out of the equity markets. Keep in mind that the Wall Street  bullies make money on every trade.

It does not matter to the bullies whether you make money or not.

Federal Reserve Bank of NY, 33 Liberty Street
Federal Reserve Bank of NY, 33 Liberty Street (Photo credit: Wikipedia)

These bullies also take many forms. Most are communicated via the media.  There is always someone trying to instill fear into investors. Most have their own agenda which does not include helping investors earn a better return.

Recently there has been some conservative talk show hosts extolling that they will get out of the market because of the actions or inactions from the White House. There will be investors who listen to the reasons for exiting and take their money out of the market.

Remember these talk show hosts are nothing more than advertising salespeople.

Now since the equity markets are random and unpredictable the markets may go down. Then again they may not. No one can predict the future.

I cannot tell you whether the next 20% move will be up or down but I will tell you that the next 100% move will be up.

Market timing does not work. However the ‘fear mongers’ want you believe this will improve your performance. One question you should ask yourself is if this person really knew what the future would bring why would they tell you?

If you are truly an investor you will ignore these short term concerns. You realize that to succeed in investing you need a long term view.

We can also conclude from a study done by Matson Money, that it does not matter who is in the White House or which side of the aisle controls Congress. In fact, in the study,

since 1926 no Democratic U.S. president has seen the equity markets down for their term in office.

This was a complete surprise to me, being a conservative. The reasons are debatable however the results are undeniable.

Remember that successful investing is not an investment problem it is a people problem.

By trying to avoid any losses we forego excellent returns over the long term. I’m not sure who said it but “patience is a virtue”. If you let the markets work for you and stop trying to predict the next crash or the next hot stock or the next hot manager or the next hot asset class you can succeed in reaching your long term financial goals.

There will always be reasons not to be in the equity market and there will always be reasons to be in the equity markets all at the same time.

The equity markets are unpredictable and random.

The logical solution is to build a prudent portfolio with YOUR
level of risk. Seek the advice of an investor coach someone who will help you with this. This coach will also keep you disciplined and focused on your long term financial goals.

To succeed in investing keep a long term focus and follow these three simple rules with the help of an investor coach:

  • Own equities
  • Globally diversify
  • Rebalance

The results will be reduced anxiety and improved performance. Unless of course, this is not your goal.

Oh yeah, in case I didn’t mention it, the equity markets are random and unpredictable.

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