Numerous times over the last week investors have asked me if they should sell their stocks because of the coronavirus. As with all ‘crisis’ events I said no, you should remain disciplined to your investment policy statement and rebalance.
There is constantly a crisis somewhere in the world. There will be other events both good and bad that will send shock waves, both up and down, into the stock markets.
That is the point, there is no way to consistently predict market movements over the short term.
Keep in mind that in order to realize the superior long term returns of the equity markets we must control our emotions in both up and down markets. Warren Buffet has a saying I find helpful.
“Be greedy when others are fearful and fearful when others are greedy”.
In other words control your emotions there is no get quick rich scheme. If the ‘experts’ actually could predict the future why would they tell you? Fund managers, hedge funds managers, stock pickers, market timers all need investors to believe that someone can and does beat the stock market.
This is all part of their marketing strategy. When a manager actually does beat the market, (luck will allow some to win), the marketing department goes to work.
Unfortunately for investors there is no evidence that past performance correlates into future success or future losses.
Shows like Jim Cramer’s are based on their entertainment value and not on their value to investors. Investing is not a game as they make it appear. To succeed in investing for the long term you should own equities…..globally diversify….rebalance.
Stop listening to short term volatility.
Any time or money you spend trying to beat the market is time wasted. Time which you could be spent improving your job skills or developing new job skills or spending time with family and friends.
So turn 2020 into the year you become an investor and not a speculator. Hire an investor coach and reduce your investing anxiety and improve your long term results.