Chart of the Month – Feb 2023
Recently, a client asked me about sectors. What are they? And how do they fit into a portfolio?
Recently, a client asked me about sectors. What are they? And how do they fit into a portfolio?
Have you ever said to yourself “If I would have just bought that stock, I would be set!” Or “How did I not see this coming? I was watching this stock years ago!” Or maybe “I should have never sold that stock!”
As this year exemplifies, stock markets have the tendency to do things we would never expect.
For weeks, the major indices had been declining but in mid-March, we saw a very abrupt reversal. I’m often reminded of the familiar saying “Investors must be present to win.” In other words, the price (or cost) of admission to the investment experience is market volatility.
Trying to time the market and choosing to sell in reaction to headlines tends to be a predictable mistake. There always seems to be a reason to sell.
The past fifteen years have been phenomenal for U.S. stocks. They've outperformed international stocks by close to 200%. Unfortunately, no one can predict when international stocks will outperform U.S. stocks, or vice-versa.
While cash may offer stability and security in the short term, the DFA Returns Web chart from 1926 through February 2024 suggests that the growth potential in stocks offers a higher rewarding investment opportunity in the long run.
It's natural to sit down at the end of the year and reflect on what happened. Here is a short recap of what happened in the markets and the world in 2022.
In investing, a key consideration is the time horizon. There is a general perception that investing is a risky proposition, but this risk can be mitigated by holding investments for longer periods.