There continues to be volatility in the markets around the world. Currently the media is focusing on the potential trade war with China. Or is it corporate earnings? Or is it potentially raising interest rates? Who knows?
With all this ‘potential’ negative news what should an individual investor do? Go to cash? Buy gold? Buy real estate? Buy bitcoin? Buy annuities? Buy CDs? The list goes on and on.
‘Experts’ can make a case for each of these. You should buy….because of…. Don’t forget these ‘experts’ make these cases because this is what they have to offer. They will profit if you buy…..
What asset class will perform best over the short term? No one can consistently predict what the markets will do.
When analyzing this there are two groups of people, those who don’t where the market is going and those who don’t know they don’t know where the market is going.
No one knows if the next 20% movement will be up or down, but the next 100% movement will be up.
That said, markets fluctuate widely in the short term. Fortunately, every major crash has a recovery, with stocks regaining all of their losses, given enough time. Similarly, while the stock market has seen many 100% gains, it has never suffered a 100% loss.
It is curious why investors see ‘crashes’ of the past as buying opportunities, at the same time they see ‘crashes’ of the future as risk. Interesting…
Arguably, only a global catastrophe such as nuclear war, asteroid collision, or other extinction-level event could cause such as disaster. In that case, your portfolio would be the least of your worries.
Free markets will prevail. Capitalism will prevail. To succeed in investing for the long term you should own equities…..globally diversify…..rebalance.