Big profits are going to be made when — not if — the market shifts
Most investors are negative these days. There certainly is a lot to worry about such as higher borrowing costs, inflation, and the threat of nuclear war to name a few. Yes, it has been a tough year for your portfolios, but the smartest investors know the conditions existing today are not going to last forever. Investors with a mid to long-term time frame look forward and try to set up their portfolios for the conditions that will exist in the future, not the conditions that exist now.
I know while in the middle of the storm it’s hard to see that clearer weather is ahead, although I believe we’re much closer to the end of this bear market. Remember, the opportunity cost for you to reach your financial goals is NOT protecting against the potential of another 5% to 10% downside from these levels, but rather missing out on the next bull market that happens after each bear market. Case and point. The S&P500 fell 25% in the first 3 quarters this year. In 7 similar situations since 1950, the average 3-year, 5-year, and 10-year returns ended up being 37%, 83%, and 214% respectively.
Plus, looks whos bullish...Corporate insiders are buying their company stock again in size during the latest sell-off. Insiders usually sell for all kinds of reasons, but they only buy for one. Given the historical accuracy of their timing, it's a positive sign.
I continue to work hard to ensure you block out the noise in the short term and remain focused on the opportunities for the mid to long term because big profits are going to be made when — not if — the market shifts.
As always don't hesitate to contact me with any questions.
Paul Polyviou, CFP, CLU