Market Lessons You Should Know

Let’s talk about markets for a minute.

The most recent inflation data shows that inflation continues to persist near recent highs. 1

The trend makes it likely that the Federal Reserve will raise interest rates again in November. 2

Does that mean a recession is inevitable? Are we past the bottom or are markets going to fall further?

It’s hard to say.

We won’t know for sure how things will play out until long after current events are in the rearview mirror.

However, the uncertainty won’t stop the media from churning out scary headlines and flawed predictions.

Instead of speculating wildly about what the future brings, what if we look for lessons and guidelines we can follow?

4 Lessons About Life

1. Count your blessings. There is so much in our lives to be grateful for.
2. Cherish your most important relationships. They’re what truly matters, especially when the road gets rocky.
3. When you think of something positive about someone, tell them right away. It might be exactly what they needed to hear today.
4. “Experience is what you get when you didn’t get what you wanted.” 3 (Randy Pausch said this. His book, The Last Lecture is well worth a read.)

5 Lessons About Markets
1. Markets can keep falling for a lot longer than we’d like.
2. Market bottoms don’t come with an all-clear signal, and missing the best days of the market can really shockingly damage your long-term growth.

3. Don’t panic and make sudden decisions. One bad decision can destroy years of good ones.
4. Stocks historically deliver strong growth over time. 4 But you only benefit from it if you can withstand the painful
periods that come with the territory.
5. You can’t avoid all risks. You CAN identify them, manage them, and focus on what’s in your control.

What lessons have you learned about investing and life?

Will you comment, and share them with me? I’m always looking to learn from the smart people around me.

Here’s the bottom line: Reaping the rewards of long-term investing means taking the good times along with the bad.

The end of a bear market looks an awful lot like the middle, and investors who panic, sell, and miss the ride back up regret it.

That’s because the best days and worst market days tend to cluster. 5 Sit the bear market out, and you’re likely to miss out on the whole play.

Sending warm thoughts,

Barry

P.S. The application for student debt relief is finally open here. If you’re eligible (or think you might be), please get your application in as soon as possible so it gets processed before the pause on federal student loan payments ends on December 31, 2022.

Sources
1. https://www.cnbc.com/2022/10/13/consumer-price-index-september-2022-.html
2. https://www.cmegroup.com/trading/interest-rates/countdown-to-fomc.html
3. https://www.goodreads.com/quotes/48126-experience-is-what-you-get-when-you-didn-t-get-what
4. https://equitable.com/retirement/articles/inflation-and-long-term-investing
5. https://www.hartfordfunds.com/practice-management/client-conversations/managing-volatility/timing-the-market-is-impossible.html
Chart Source: https://www.putnam.com/literature/pdf/II508.pdf