Imagine meeting me in January 2020 and I predicted the following for the markets.
“I’m really worried. I believe 2020 will be the year we are hit with a global pandemic, killing over a million people and causing the world to close borders and force its citizens to stay home. All major sports here in the US will cancel their seasons, the US economy will shut down for months leading to unemployment levels not seen since the Great Depression. Children will attend school (maybe) with masks on and most people, if they aren’t unemployed, are going to be working from home. Furthermore, on the eve of a US presidential election, the leader of the free world will come down with this pandemic and be hospitalized.”
Would you have believed me? Think I’m crazy? Probably. But I won’t stop there.
” After all the economic and human toll caused by the virus, the stock market will drop 34% in 6 weeks. Including 10% in one day! But don’t worry! Over the summer, the stock market will rebound dramatically will actually be UP about 8% YTD come October and the residential real estate market will be booming. Things will feel so optimistic that Dow Jones Industrial Average will rise over 1000 points in the weeks after President Trump is admitted to the hospital with Covid-19”
Still sound crazy? You bet. However, here we are on 10/16/2020 and every single sentence above is 100% true. Who could have predicted?
On a serious note, the biggest economic lesson from 2020 is that the business of prediction is amazingly hard. Almost impossible.
Yet, here we are on the eve of a presidential election and we are trying to predict again! Predict who is going to win and predict the impact this election will have on our money.
Some of you like Trump, and are worried if Biden wins. Some of you like Biden, and are worried if Trump wins. Either way, we NEED to do something!
Or do we? Maybe not.
This is an emotional time and investment decisions driven on emotion can be a mistake. I can’t think of better way of preventing poor decisions with your investments than by attending our upcoming webinar in Tuesday!
It’s All in YOUR Head! How Behavioral Finance Impacts Investors and Investments next week October 20th, from Noon to 1:15pm. (click her for details)
We are all human. All of us, myself included, are prone to biases that could negatively impact our decisions. The key is to find out which biases you personally possess. At this workshop, we will help you identify common mistakes and biases and walk you through a process of discovering your own.
Hope to see you all there and don’t keep us a secret! Please pass this on to someone you know that could also benefit from this great advice!
