The year 2020 has become the year of the crisis. First there was the coronavirus which continues. This was followed by the ‘racial equality protests, which continues. The coronavirus appeared to be reversing, until it came roaring back.
Then the protests turned into riots in many major cities. What is happening has been described as a war zone.
Let’s face it, 2020 has become the year to remember and one to forget at the same time.
The rest of this commentary has been repeated it seems far too many times. Going back, I don’t know how far.
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.
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.
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.