Markets by their very nature are uncertain and volatile. While we often crave some sort of idea as to what the future holds, the markets are unpredictable, which can be stressful.
Unlike market and economic forecasts, the forecast below is based on investor behavior. These factors can be more dependable than market predictions and more important to an investor’s long-term well-being.
- Something will happen in the economy/market that surprises us, but may seem obvious in hindsight
- Investors who focus attention on the market often will experience increased stress
- You may be tempted to change your investment strategy based on market performance, forecasts, and/or your personal beliefs about the future
- Your investment decisions and reactions to market events will have a significant influence on your personal investment return
- Investors that focus their time and attention on things they can control will have less stress about their investment experience than those that focus on what they wish they could control
Conviction, patience, and discipline are virtues every investor should develop. They aren’t easy, yet they are essential for your success.
Here at RMB, we recommend a long-term view, maintaining diversified portfolios of investments that strive to anticipate a broad range of outcomes. The uncertainty around global economic events and corrections in equity markets are always possible, which is why we believe time in the market is more important than timing of the market.
©2022 The Behavioral Finance Network. Used with permission
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. No strategy assures success or protects against loss.