Sure Thing or????

On a cool and rainy day I was watching the NFL pregame show. Each week the ‘experts’ pick the winners of specific games. These ‘experts’ are made up of Super Bowls winning players as well as coaches. There ‘experts’ should be able to correctly pick the winners of any game each week.

After all  there are only 16 games to choose from. These ‘experts’ have access to all the statistics. Who is playing, who is hurt, who is playing well and who is not. Past performance is there only criteria. Given the past these ‘experts’ make their predictions.

Well Sunday Terry Bradshaw, Super Bowl winning quarterback for Pittsburgh Steelers back in the 70s. He was also MVP of  Super Bowl(s). These credentials should give him the credibility to pick the winners with ease.

Sunday Terry said that Chicago Bears were a sure winner over the Miami Dolphins. There was no chance that Miami could win this game. Terry gave many reasons the Bears great defense, Miami had some key defenders hurt. The list went on. Again he said Miami had no chance. This was a sure thing.

You can guess what happened. Miami won in overtime 31 to 28.

Investors can learn a lesson here. There is no such thing as a sure thing. The equity markets are random and unpredictable. Just like NFL games. Even if you have all the statistics supporting your position. You cannot pick the direction of the equity markets, nor can you pick the stock winners.

If the NFL ‘experts’ cannot pick the winners out of 16 games each week. What makes you think you can pick the right stocks and the direction of the equity markets.

When you build a prudent globally diversified portfolio a correct prediction is not required. Over the long term you will succeed. There will be, however, times when your diversified portfolio will under perform a specific asset class.

Investors need to remain disciplined and maintain their long term view of the equity markets. Most cannot do this alone.

It will require the help of a fiduciary adviser/investor coach. Your coach will keep you disciplined and remain focused on your long term goals.

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