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Stop It! You Don't Know When Stocks Will Fall

The “prediction addiction” is alive and well. Everyone on the planet has an opinion about the stock market direction, but mostly these are manifestations of deeply rooted behavioral biases. All forms of media overflow with stories about investing at “the right time”. Total nonsensical garbage. The “ right time” is a myth. Never mind, investors still clamor for the magic wand that will immunize them from possible market declines, all the while missing the actual increases. Not exactly a winning strategy.

Indeed, financial markets go up and down. Investing necessarily involves risk but this risk pales in comparison to the largest risk for most individuals, what we call “ shortfall risk”. The combination of inflation, increasing life expectancies, and undersaving create a very difficult dilemma for many investors. Make no mistake, shortfall risk, the risk associated with declining lifestyle and running out of money, is a very real possibility for many people nearing retirement.

To solution to almost any big problem, the solution often creates a sense of discomfort. The U.S. Navy Seals have a saying : “Get comfortable being uncomfortable.” There is a direct connection between how “uncomfortable “ you are willing to become and solving shortfall risk. Being a “successful” investor means investing in a way that funds your specific objectives. This usually translates into being a permanent stock market investor.

The right time to invest is anytime that you have money to invest. We rarely see clinets that have oversaved or over invested. No one knows when the market will reach the, (for now), temporary high. also don’t know where the market will bottom and start ascending once again. What we do know is that there have been about 57 market “corrections” since the end of World War II,(at least 10% declines), and during that 71 year period, the S&P 500 has increased about 165 times. If you can “get comfortable with being uncomfortable” and stop trying to get out of the market before trouble arises, you end up winning the game. If you can’t, and insist on trying to anticipate each correction, you lose the game. It’s just that simple. 

Our solitary focus is on helping clients "stay in their seat" and avoid lifestyle altering financial mistakes. The long term scientific evidence forms the framework for our advice. The primary determinant is successful investing has absolutely nothing to do with market timing and everything to do with behavior. That's where we focus and how we add value. Ready for a real conversation? 

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Discover how to plan for your retirement while you still have "Possibilities",
rather then ending up with "Probabilities".

What You Can
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Working With Us

Choosing a financial planner is not a simple choice. We encourage you to interview several potential advisors. It is our feeling that a lot of financial people have lost their way, we haven’t. We offer a fee-only fiduciary financial planning model that validates our client-first ambitions.

Read my posts, listen to my podcasts…and when you’re ready for a real conversation about your wealth, call us.

 

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J.E. Wilson Advisors, LLC
2431Devine Street
Columbia, SC 29205
803.799.9203 or 888.799.9203

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