We’ve been here before
One year ago no analyst could have predicted oil would surpass $120 a barrel. Yet here we are.
No one saw oil futures going into negative territory in 2020, yet that happened as well.
In 1979 there was even a call for the end of the stock market, lol.
I guess that magazine issue didn’t age very well. One thing is for sure. It’s difficult to predict the future.
But that doesn’t stop people from trying. 😅
Uncertainty is the only certainty. So we have to learn to live with it.
Time horizon matters significantly
Fortunately there are ways to make the unknown easier to deal with.
One way to increase your success rate when navigating the stock market is to extend your time horizon.
Stocks typically are priced for potential events coming up 3 to 12 months into the future.
So if you can leave your investments for a longer period of time you will have better odds than most.
Here’s a chart from Ritholtz showing how likely it is to make a positive return in the market based on holding periods.
During turbulent times it’s a good reminder to continue staying the course, and trust your long term plan.
Short term strategies like trading in and out of the markets only work if you know what you’re doing. Otherwise it won’t be much fun. 🙂
Random Useless Fact:
About 50% of people forget to cancel their free trials before they’re charged with auto renewals.