You’ll often hear folks like me say that investors or markets “hate uncertainty.”
And that causes market drops and volatility.
Why do we hate uncertainty so much?
And how can we look past initial reactions and embrace the power of uncertainty?
I made a short video discussing 3 secrets to embracing the power hiding inside uncertainty.
First, a quick note: There's not much new perspective on current events I can offer. Markets are still locked in a volatile pattern and will probably continue that way for the foreseeable future. We're watching the data closely.
Today, I have a big-picture question for you if you're interested.
While absorbing the recent news, we can be forgiven for thinking that the world is going off the rails. There's a global pandemic, worrying inflation, atrocities in Ukraine, and "unprecedented" developments everywhere. A fear arises that it's all getting worse, somehow.
If we feel that way, we're not alone. A lot of people feel that way. (1)
So, let's ask the big question: Is the world getting worse? Or is it actually getting better?
Have you heard that we only use 10% of our brains? Or that lightning never strikes the same spot twice? Think those are scientific facts?
Well, they’re not. They’re actually a couple of myths that have been debunked. But many folks still take them for facts. (1)
In the long run, believing those myths may not matter at all. You may lose a trivia game, but those myths won’t affect your wallet or financial decision. The myths about investing can, though.
Have you bought into any of them without realizing it?
Investment myths can easily disguise themselves as facts. And they can mislead us into making choices that don’t line up with what we really need or want.
Those myths and the facts behind them are the focus of this month’s Visual Insights Newsletter.
The truth is it’s easy to fall for the myths about investing, no matter how old or smart you are — and no matter what experience you’ve had in the markets. If you know the facts, though, you can look past the fiction and make better, more sound investment decisions.
And that can help you stay on track to the financial future you really want.
Go ahead and click here to see if you’ve fallen for a myth about investing.
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Just a quick note to offer some perspective on the (many) headlines floating around. There are almost too many things to be worried about right now, so I’d like to pause for a second to remember the abundance in our lives. Especially when so many folks are suffering. When thinking about the world gets stressful, I remind myself to be grateful for what I have.
Ok, let's dive in. (Not in the mood for economic stuff? Scroll down to the P.S. for a mental snack.)
Are we in a bear market?
In some sectors, yes, stocks have dropped more than 20% from their last peak, which is the technical definition of a bear market.(1)
So, we're in bear territory, at least. But, as of this writing, the broader S&P 500 has not entered a bear market. It might, of course. That’s absolutely possible in this environment.
However, let’s remember that we’re not day traders. We’re long-term investors, and the day-to-day and week-to-week gyrations aren’t as important as what happens over years.
