What is Normal?
“When things calm down and go back to normal, I’ll…” get back out there… go back to dining out… start investing again… make decisions about my retirement… finally do some planning.
Waiting for things to get back to normal with the election, the economy, the market, and the like is a common theme I hear often right now.
What is normal?
While the coronavirus continues to stay with us, continuing to affect our way of life, perhaps a vaccine or at least effective treatments are around the corner so fears can be alleviated.
Of course, there will always be something else coming besides the election, economic and market fear mongering and the like. There will always be an “uncertainty” to deal with. By its very nature of being uncertainty, no one knows what “that” is or will be.
The reality is that there are ALWAYS unknowns and uncertainties whether an election year or not. And no preparations or fortune telling can prepare you for the uncertainties that are to come.
No amount of study, research, economic commentary, or market forecasting can ever really prepare you for “surprise” events like COVID-19. By their very nature, they are surprises, so no one can prepare for them or know exactly how they will play out in the short-term.
Among all the lessons to be learned from this year’s swift market decline and recovery is, of course, that the market cannot be timed. Market timing is a fool’s errand.
Election year or not, the market in the short-term will go up and down. The election results, economic forecasting, and pontificating talking-heads will not change this short-term reality.
Aside from the burden of dealing with capital gains taxes (yes, for most their equities do have or should have capital gains in the portfolio) by selling equities right now, your chances of getting the timing just right on getting out of the market and back into the market are very poor.
The best course of action in the midst of current times, as “uncertain” as so many are eager to label our current situation, is to stay the course. As an investor this means continuing to hold onto those quality businesses with a long-term view that matches your long-term goals.
Of course, the challenge for most investors is that way too much of their portfolio is full of non-quality companies through the ownership of mutual funds and exchange traded funds.
The reality aside, staying the course and keeping a long-term view produces superior results over the long-term.
The secret to doing this is having a personalized and holistically integrated investment and retirement income plan built around you, and your goals.
If you’re not sure if this is what you have, then request a complimentary 22-Minute Retirement Success Conversation to learn more.
Quote:
“‘Prices are too high’ is far from synonymous with ‘the next move will be downward.’ Things can be overpriced and stay that way for a long time…or become far more so.”
– Howard Marks