Financial planning advice for investors: don’t attempt to predict when the next downturn will occur. Assuming you’re correct and predict this, you also have to predict the next upturn. And gains in the market happen so rapidly that not even professional money managers can beat market rates of return over long periods. See chart below:
Can they get lucky every now and then? Yes. And so could you; which is part of the problem.
When it comes to investing, your worst enemy is yourself. Jason Zweig at Wall Street Journal wrote a great article about this–click here to read it.
Next-a friend and mentor in Tennessee just posted a good video about his predictions for the next downturn and appropriate actions prudent investors should follow. Here’s the link to his video as well.
How should you respond: have an firm like this one do an unbiased investment analysis to insure you’re truly diversified, not exposed to too many stocks and understand all the costs associated with your investments.
Then, invest in the market using a portfolio designed to capture market rates of return with lower volatility and expenses. Can this firm offer that? Yes–believe that!
