What is your biggest investment surprise for next year? Does your predictions or that of others get you surprised? Allow me to walk you through a bit of history these predictions from the biggest investment suggestions are predicted by the so called experts in that field of forecasting.
In 2000 pundits said, “You can’t lose money in tech stocks.” Investors went all in. The higher the price the more money poured in.
Right until the big surprise. The recession of 2001. Many tech stocks were down 90%. Some incinerated.
2005 pundits said, “You can’t lose money in real estate.” Investors went all in. Buying houses at escalated prices with loans they couldn’t afford.
Right until the big surprise. The recession of 2008. Many houses were down 50%. Equity disappeared as homes were foreclosed.
2009 pundits said, “Buy gold. Sell your stock. You can’t lose money in gold.” So investors went all in. Sold their stocks at losses and bought gold at escalating prices.
Since then pundits have predicted recessions, recommended ethanol and hedge funds. All were a sure thing. Investors went all in.
And all surprised to the downside.
Yet, those who patiently kept investing in a quality diversified portfolio have been rewarded exponentially.
I learned long ago, sometimes the hard way, that you can’t foresee surprises. Because, well, that’s what makes them surprises.
And the pundits, with all their predictive powers get blindsided by the surprises most often. And if they’re investing in what they’re recommending they get just as burned.
So what do you do?
First, stop listening to the pundit’s.
Second, stop trying to discern surprises.
Third, keep consistently investing.
You’ll miss some occasional surprises to the upside. But you’ll also miss the irrecoverable surprises to the downside.
Oh, and you’ll have a lot more time to concentrate on fun stuff. Like planning how you’ll spend your comfortable retirement.
You’ll be successful in investing only as you stop trying to outguess the surprises.