What if you had a friend who secured a DeLorean and traveled ahead five years to learn about and profit from the future? Upon his return, you asked him about the stock market so you could make the best decisions for your investments.
About the stock market and economy he said,
“Oh, it was rough. In the next five years there is a major economic crisis and not one, but two bear markets.”
Given this information, what would you do? Would you buy stocks coming into this environment. Would you hold your current investments? Or would you sell?
Our brain’s natural response is to get us to safety and avoid danger at all costs. The impulse and associated feelings may influence many investors to sell.
Learning From the Past
This scenario played out over the last five years. Just in the last five years, we had the COVID-triggered economic crisis that drove the market went down 34%, and then surging inflation where the market went down 25%.
Yet, despite these negative events, the market increased 97% over the last five years…causing anyone who “got to safety” to miss out on significant gains.1
Helpful Perspective
Even if you were certain of some information about the future, much information is simply unknown. The market is too complex and uncertain to try to time or outsmart. For that reason, your personal plan should be the primary influence of your financial decisions. And that is what I am here for – to help you make the best decisions possible, in line with your goals and objectives.
– Jonathan
1.Returns from 05/2019– 05/2024 and include the reinvestment of dividends. Performance calculated at dqydj.com. The Standard & Poor’s 500 Index is a capitalization weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries. All indices are unmanaged and may not be invested into directly.