How to Invest During Marco Events & Turmoil

From Barry Ritholtz:

I keep a short list handy to remind myself of all the things investors must remember when these sorts of macro events cause turmoil:

●Markets surge and sell off. This is the ordinary course of events.

●The future is inherently unknown and unknowable. Those who claim otherwise are trying to sell you something.

●What sounds sexy and looks good in a brochure is not what usually makes you money over the long run.

●The gurus and talking heads have failed you. Once again, their forecasts were wrong. They were selling you a product, not providing any insight.

●Emotional reactions are bad for your portfolios.

●“Nobody knows anything.” The William Goldman quote, written about Hollywood, applies to just about everything in life. Get used to it.

●You need a plan. EOM.

●Your brain has evolved to adapt to keep you alive in changing conditions, not to make risk/reward decisions.

●The world is filled with random outcomes. Even more so when people are involved.

●Boring, steady portfolios can withstand about anything you throw at them.

●“Uncertainty” is a misnomer. The future is always unknown and always uncertain. When you hear people using the word “uncertainty,” it is because they are scared enough to briefly acknowledge their own ignorance.

●Adrenaline, it turns out, is not the basis of sound portfolio management.

●That plan mentioned above? You must have discipline to stay with it.

●Bull and bear markets have their own timelines. They do not care about your retirement, your saving for your kid’s college or the new house you want to buy.

●Investing is hard.

●Sometimes, Brexit happens.


https://www.washingtonpost.com/business/get-there/brexit-this-is-not-a-drill/2016/06/24/d3c1f72a-3a21-11e6-8f7c-d4c723a2becb_story.html