Given current world events I thought it would be good to discuss and remind folks of how world events generally will effect the market since I see tons of doom posting this morning.
I haven't been in the market too long (15 years), but one thing I can tell you is that the biggest mistake you can make is investing based on your bias, whether it be political or otherwise. Whether you believe the world is in a much worse place than it was a few years ago or you feel the market is more manipulated today than it used to be: that is your bias, the reality is there are tons of people that may feel opposite of you or don't even consider any of this when investing. If you spend any amount of time on Reddit you will enter this feedback loop where all your biases will be constantly reaffirmed: do not let this impact how you invest.
The world is fucked up today, but it has always been fucked up depending on what lens you are viewing the world through. Seeing all the turmoil in the world today and using that to predict the future of the stock market is not a novel thought, the turmoil truly does not matter to the market outside of short term fluctuations. Invest broadly and consistently for a long period of time and you will always win, the day when that is not true you will have much bigger problems than the performance of your portfolio.
Posted by OkBeat2138
2 Comments
The winning strategy:
Optimism + Dividends.
Great post. The part people miss: the market is forward looking, and by the time any news breaks, prices have already moved to adjust to the new information. So unless you moved *before* events, you’re already taking in the loss. And adding your bias about how events might play out, or who is right or wrong, just adds even more commentary that risks being wrong.
Totally agree that broad and consistent wins over time.