Concerns about market downturns certainly come as no surprise. After all, steep corrections and crashes can be alarming for even the most steely and disciplined investors. So, when markets reach all-time highs, investors tend to be concerned about investing their hard-earned money in overvalued stocks. We believe that every day is a good day to invest no matter what the market has done recently.
Every year we try to beat those insurmountable odds to best our friends and colleagues during the NCAA March Madness season. It is not that different from investing when you think about it. We would all love to pick out which investments will fare the best over the coming period.
Tulips were first imported from Turkey to Western Europe in the late 1500s. There was a demand that led tulips being listed on the Amsterdam stock exchange in 1636. At its peak, a single tulip bulb could be worth thousands of florins, a gold coin of varying weight and purity. Could such an amazing run last? Of course not, and tulips’ value would come crashing back down to earth over a three-year period ending in 1638. This is regarded as one of the earliest, most extreme asset bubbles in history.
No matter how entertaining the markets can get, keep a long term focus and look past the daily noise.
When I look at 2020, I am reminded that whether we are talking about industries or individual stocks, predicting the market is extremely difficult. Some people get lucky, but the skill to have repeat performance is rare.