The month of January was marked by negative returns for global stock markets. But, as the well-worn phrase, “Is your glass half full or half empty?” implies, our view of, or the way we feel about the state of markets as investors, may be more related to our personal dispositions than what the numbers indicate.
Right after, “What will the stock market do next?” the positioning question may be the most asked and re-asked question by investors of all types.
Educated optimism is an antidote for anxious uncertainty, and it can be of great help in enabling investors to embrace the uncertainty that is with us all the time.
Barbells work great at the gym because they put weight on a bar in such a way that it’s balanced, leaving room in the middle for someone to use it to workout. We often see portfolios that are designed like a barbell at the gym: lots of risk in one account and lots of cash or very short-term securities in another. In aggregate, it might produce some balance, but the reality is that it can create some real challenges.
For a minute, I want to think broadly about the question, “What does it mean to be an investor?”
When the going is good, we’re not all that concerned with asking or answering the question. It is when the going gets tough, like right now, that we find ourselves more interested in asking. So, “What should we do?”
You do not need to pick the next big winner in order to have a successful investment experience. As a matter of fact, behaving as if this were possible is an almost certain way to have a terrible investment experience. What are the hallmarks of a more successful approach?
Does it help or harm the average long-term investor to peek at their own accounts or pay attention to the market every day?
For the person who is currently contributing to a portfolio and does not need to take distributions anytime soon, this is a gift. That’s right, a bear market is a gift to those investors. If you are contributing to an investment account right now, you are already in the Bear Market Buyer’s Club.
Takeaways from a smattering of the headlines across a wide range of news sources in 2022 and early 2023.
Morgan Housel, author of The Psychology of Money, spent some time with us last month. Here are my takeaways.
Tragically, we humans are, to put it bluntly, awful at wanting the things that will create the most meaning and satisfaction in our lives.
As you peek into the future – hopefully one with greater discretionary time and money – do you envision yourself increasing or decreasing your investment in the well-being of the people close to you and the world in general? Do you see yourself sticking close to the mess of the world or investing in ways that escape it?
Last year was a very up and down year in the market. That’s not abnormal. In fact, it’s what happens most years. December 12 was the only time last year that I looked at the numbers. In not looking at the numbers throughout the year, I not only minimized worry, but also created the opportunity for a happy surprise.
Don’t believe the lie that you don’t belong or that the keys belong to someone who won’t give them to you.
Stock market risk is the primary focus of the financial news. The reason is simple. The scarier the headline, the more eyes are attracted to it.
