Lets address the talk about an upcoming stock market collapse, and the best ways to invest in 2020 moving forward
Upcoming Stock Market Collapse Of 2020
During a time where our money is volatile, people are out of work, stuck at home, and looking at other ways to build back their income – many people turning to the stock market as a way to do so…and, inevitably, that’s likely to lead to problems later on down the line, if – and when – things don’t turn out as expected.
We have one type of investor who’s sitting on the sidelines, holding out, and patient waiting for everything to begin crumbling down, and for the stock market to FINALLY reflect what’s happening in our economy.
BUT…when it comes to all of this, here’s the one thing that always needs to be remembered: The Stock Market is NOT our economy.
Even though stock prices CAN be influenced by the unemployment rate, strength of businesses, and how confident investors are in the future…it doesn’t mean the two will necessarily match one another, and what happens with stocks…versus what happens with our economy…can be two TOTALLY separate things.
This type of thinking also reminds me of the saying: “The Market Can Remain Irrational Longer Than You Can Remain Solvent”
This means that – as much as you believe something SHOULD happen…like, we SHOULD see the stock market go back down – the market can, and WILL, outlast you and your money.
But now, let’s talk about that second type of investor – the ones who’s optimistically plowing themselves back into the market right now, because things HAVE to go back up to where there were before, right? And the faster the market moves up…the quicker they have to jump in, before they miss the gravy train.
And THIS is actually where I’m the most concerned, because – given the recent, new wave of popularity towards finance and investments, combined with the EASE of now investing from your phone, in fractional shares, with as little as $1…I’m worried that there’s an unrealistic expectation where once something goes down – it HAS to go back up. And I just think, that type of mentality is going to set a LOT of new investors up for massive failure if they either see their investments drop in price – or, if things take longer to recover than they initially anticipated.
JUST because we’ve seen a massive drop, DOESN’T MEAN we can’t see another drop – and, it doesn’t mean we can’t trade sideways for quite some time, while your money just sits there doing nothing. So, given that…I think it’s really important to set an expectation UPFRONT – that, anytime you invest, you should invest knowing that NO ONE knows what’s going to happen, EVERYONE loves to guess and predict about things they have no control over, and the BEST guidance is just to BUY, and HOLD as long as you can knowing that, if you’ve diversified enough – you should see a positive return, long term.
Real talk, everyone…that’s the only investment advice I really, truly stand by – because there’s just NO WAY anyone can try to predict what’s going to happen over the next 1-3 years.
But, quick side note here…in terms of making money and beating the market…what’s even more surprising…and this is so perfect to prove that markets are totally irrational… is that a study was JUST released…which found the best way to pick a WINNING STOCK…is to find one with a cool ticker symbol 😉