28/9/2022.Why Advisors Don’t Recommend Selling Out In A Recession
A long time ago, I once heard my father jokingly instruct my mother on reversing the car. “The trick is, to stop just before you hear the bump.” An obvious statement, but with the kind of logical paradox my dad enjoyed: if you stop before the bump, then you never actually hear it – so how do you know when it would have been? And if you do in fact hear it, well, it’s too late anyway, isn’t it?
How to Unblock Your Emotional Brain-Freeze
Short-Termism Punishes Investors
Because this: How do we know when to get back into the market again?
Three Basic Facts About Market Bottoms
- The further prices have fallen from their previous high, the greater the chance that today is the market bottom.
- The only way to know for sure that we’ve reached market bottom, is to see it in the rear-view mirror - prices have started to recover and are already heading back up.
- Historically across equity markets, the strongest recoveries tend to follow close behind the worst declines.
The Most Successful Investors
Trust Your Asset Allocation
Take Withdrawals from Fixed Income (Bonds), not Equity
Investing New Money
Most investors prefer to risk missing out on a bit of potential upside, rather than misguess the market and experience loss immediately after investing.
Great News For Regular Savers
Wisdom of Crowds
“In all cases, the stock market began to recover even as the economy continued to shrink.”