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  • Writer's pictureBrock Williamson, CFP®

What if You Knew

What if you had a friend who secured a DeLorean and traveled ahead five years to learn about and profit from the future? Upon his return, you asked him about the stock market so you could make the best decisions for your investments. 

 

He said, “Oh, it was rough. In the next five years there is a major economic crisis and not one, but two bear markets.” 

 

Given this information, what would you do?  Would you buy stocks coming into this environment. Would you hold your current investments? Or would you sell?   

 

Our brain’s natural response is to get us to safety and avoid danger at all costs. The impulse and associated feelings may influence many investors to sell.  

 

Learning From the Past 

 

This scenario played out over the last five years.  Just in the last five years, we had the COVID-triggered economic crisis that drove the market down 34%, and then surging inflation where the market went down 25%. 

 

Yet, despite these negative events, the market increased over the last five years…causing anyone who “got to safety” to miss out on gains. 

 

Helpful Perspective 

 

Even if you were certain of some information about the future, much information is simply unknown. The market is too complex and uncertain to try to time or outsmart. For that reason, your personal plan should be the primary influence of your financial decisions. And that is what I am here for – to help you make the best decisions possible, in line with your goals and objectives. 

 

©Behavioral Finance Network 

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