What is the advice that we get when we want to do something exceedingly well? It’s simple, learn how the best of the best do it and copy them.
We are now going through the worst financial and market conditions since the meltdown in 2008 and 2009. Who are the “best of the best” that we should listen to? There is the media, but most journalists, while having good intentions, have little experience and deep knowledge about money. Or we can look to an acknowledged master like Warren Buffett.
Almost all the worlds investing greats tell us that there is no way to accurately predict the stock market in the short-term, and basing investment decisions on media headlines is a bad idea. Furthermore, history tells us that there are tremendous long-term risks to trying to time the market. Just ask those who went to cash during the 2008/09 financial crisis and did not reinvest until the recovery was well underway.
Spending a few minutes to read Mr. Buffett’s New York Times article from October 16 of 2008 is a great starter to keep things in perspective. Keep in mind that October 2008 was right smack dab in the middle of the worst financial crisis since the 30’s. A few months after this was written the world entered the longest bull market in history starting on March 9, 2009.
One of Buffett’s most relevant quotes in this is “The hapless ones bought stocks only when they felt comfort in doing so and then proceeded to sell when the headlines made them queasy.”
Some of you may be feeling queasy right now, especially those nearing or in retirement. Fortunately, a bull has followed a bear EVERY TIME.
While we will hear about horrible economic numbers for Q2, things can change very quickly. JP Morgan tell us in their quote below that the recovery has already started in China where all this started.
I don’t know how quickly all this will be over, but, using history as a guide, it will end.
Thank you for taking the time to read this. I hope you found it enjoyable and of value. Please stay safe and healthy, keep your distance from others and follow health guidelines diligently.
Feel free to contact me personally should you have questions and pass this on to anyone who could value from it.
Paul
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