Managing Market Uncertainty

[Midpack]

Maybe not for everyone, but a (very) popular investing mindset here...

If you really want to grasp this, listen and carefully note ALL the financial news/gurus say, and then wait and backtest their "advice." You'll quickly see some alarmingly contradictory positions, and eventually you'll see what they know for sure - not much...

What are you doing in this market environment?

Whenever the markets grow particularly volatile, investors understandably want to know where they stand, and there’s never any shortage of market gurus claiming to know the answers on what lies ahead. Should you listen to them? Do their predictions matter?

My first reaction would be, no. It’s not possible to know the future. Listening to the gurus will just confuse and frustrate you. “Stay the course” is the better answer. It’s the one you’ll hear most professional advisers recommend when markets are moving up and down like a roller-coaster. Forget the latest prediction in stocks, interest rates and commodity prices. Just set your asset allocation using low-cost index funds and forget it.

Sound logical? Sure. But does it sound like something you can actually do “in this market environment”? Perhaps not. How does a human being in today’s connected society go through an entire day without hearing about some economic forecast, or China or volatility in the financial markets? It’s not easy to tune out the world.

So, here’s another approach you might try. It’s a bit radical. We’ll call it our “crazy like a fox” idea. Embrace the noise. Listen to as many market gurus as you can possibly stand. Immerse yourself in CNBC and Bloomberg TV. Turn up the volume on Jim Cramer. Get so confused and fed up that you want to throw a shoe at your monitor. Then maybe you’ll remember what you probably already know deep inside: Because future price changes depend on unpredictable human reactions to unknown future events, nobody – and I mean nobody – knows what’s going to happen next in the markets. That’s a good thing to learn.

http://www.rickferri.com/blog/inves...YpEFqfbdeBoRfuGjnpZKh8ZSWy0H-A&_hsmi=22737855

 

[target2019]

I think the columnist has run out of fresh ideas. Had an interesting exchange with him on M* a few years ago. I mentioned that if someone needed the handholding, then try his paid service, get familiar with what's required to maintain an AA, and take over control in a year. His response was along the line of he did not want that kind of business. He would lose money because of the upfront business costs. Not many altruistic voices can be found in investing.

 

[Midpack]

I think the columnist has run out of fresh ideas. Had an interesting exchange with him on M* a few years ago. I mentioned that if someone needed the handholding, then try his paid service, get familiar with what's required to maintain an AA, and take over control in a year. His response was along the line of he did not want that kind of business. He would lose money because of the upfront business costs. Not many altruistic voices can be found in investing.

Not disagreeing, but what are the fresh ideas in long term investing? Robo-advisors?

 

[ETFs_Rule]

That's the efficient market hypothesis. 50% think stocks are gonna go up and 50% think they're gonna go down. At the end of the day you don't worry about it because you diversified according to your appetite for risk, goals, etc.