Many investors believe that there is someone, some advisor, some investment manager, or some brokerage firm that will have the ‘answer’ to beat the market.
Just recently there has been controversy surrounding GameStop stock. A group of small investors got together and managed to manipulate GameStop stock. They made a lot of money. But the real story was they caused some large Hedge funds to lose and lose big.
Many take this as an opportunity to make money using social media and a group of like-minded investors. They believe they have found the ‘answer’.
Finding the ‘answer’ will allow them to save less and earn more to achieve their long-term financial goals.
The sad truth is there is no substitute for a sound savings strategy combined with building a prudent portfolio which is aligned with you goals and tolerances.
There is no substitute for designing this prudent portfolio and remaining disciplined to that strategy.
Do not expect to predict or forecast stock prices and movements.
Do not expect to pick winning stocks and beat the market.
Do expect to achieve close-to-market returns over time and to see daily, weekly and yearly volatility. Reduce your costs, use diversification, and sit tight. If you expect the impossible you will be frustrated, unhappy and fearful.
If you believe your new adviser has the ability, to get into the market and out of the market at the right time. You will be disappointed over the long term.
Remember the Wall Street bullies want you to continue to search for the ‘answer’. These bullies make money on every trade whether you do or not.
The stock market is the greatest wealth creating tool ever created, IF properly used.
Attempts to ‘beat’ the market, have been unsuccessful in the past. Looking at a short term, outperformance will lead to disappointing results, long term.
To reach your long term goals you must own equities….globally diversify….rebalance.