The stock market could jump up or tank this summer, be prepared

Will the market drop this summer? Does it matter? Yes, and no.

The hardest thing about investing is dealing with emotional swings. People really want the market to go up and never go down, but wishing won’t make it so.

These emotional swings lead people to make big mistakes. Many sold in 2008-2009 and haven’t gotten re-invested. The opportunity cost of that is HUGE.

It’s better just to start with the premise that the market can go up 100% and down 50% (as Benjamin Graham suggested decades ago). Just accept that now because it has throughout recorded history.

If you are rattled by that prospect, then you don’t belong in the game (and you’ll have to save roughly three times more money per year to reach the same goal as someone who is investing in stocks).

If you invest, you must be prepared for such swings, even though that is tough to do.

Could the market tank this summer? Yes. Will it? No one knows. If it does, you need to be emotionally prepared to handle a drop.

Could the market continue marching up and double over the next 7 years? Sure. Will it? No one knows, so just be prepared.

Nothing in this blog should be considered investment, financial, tax, or legal advice. The opinions, estimates and projections contained herein are subject to change without notice. Information throughout this blog has been obtained from sources believed to be accurate and reliable, but such accuracy cannot be guaranteed.

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The stock market could jump up or tank this summer, be prepared

What if inflation isn’t low?

Provocative article in CFA Institute Magazine questioning if inflation isn’t really low. What if inflation stats are misreporting actual inflation? What if central banks are keeping rates low and that is causing the income inequality that so many commentators are braying about?

Nothing in this blog should be considered investment, financial, tax, or legal advice. The opinions, estimates and projections contained herein are subject to change without notice. Information throughout this blog has been obtained from sources believed to be accurate and reliable, but such accuracy cannot be guaranteed.

What if inflation isn’t low?

Market timing and market valuation

Excellent article from Morningstar on market timing and valuation.

Nothing in this blog should be considered investment, financial, tax, or legal advice. The opinions, estimates and projections contained herein are subject to change without notice. Information throughout this blog has been obtained from sources believed to be accurate and reliable, but such accuracy cannot be guaranteed.

Market timing and market valuation