What Should Investors Do Now?

What Should Investors Do Now?

May 15, 2021

While driving to work the other day I was listening to one of the business news networks and the obligatory question was posed by the show host to the “expert” guest,  “Following this just released report, what should investors do now?”.  The expert gives their opinion and recommendations to move dollars out of the markets into cash OR move cash into the markets suggesting specific sectors and may even mention a few individual company names.  A few weeks or months later following another report, the same expert(s) can make compelling recommendations that are completely opposite from their previous ones.  Sound familiar? 

Whether coming from television or radio, it does not matter what business network is on, I am routinely amused at how the term “investors” is used.  It falsely implies that investors need to tune in and stay tuned in daily to know what the experts are saying about how to invest now, following the recent report, to be successful.  I understand the programing.  It is focused on the short term and designed to obtain and increase viewer and listener numbers; higher numbers translate into more advertising dollars.  It all works together nicely with the message playing to most individuals’ natural human weakness of acting on impulses and feelings.   But works nicely for who?  Not individuals in my opinion, as it is counterproductive and damaging to most individual investors. 

Successful long-term investing requires establishing a well thought out plan along with faith, patience, and discipline to act on the plan and not react to volatile markets, news events, or the latest celebrity expert’s short-term recommendations. 

The equity market cannot be consistently timed any more than the economy can be consistently forecast.  Thus, the only way of assuring that one will realize the full permanent return of the mainstream equities is to hold them steadfastly through temporary declines.  A small percentage of investors may be able to do this at times, but most successful investors choose to work with a trusted advisor and financial planner who is also their behavioral coach to help prevent them from giving in to impulses and feelings especially when markets are volatile.

So, what should investors do now?   Ignore all the news and events?  Not at all.  Be wise and discerning with good balance and enjoy life!  A competent trusted advisor can help you work towards achieving those characteristics while looking forward to the future with confidence.

Securities and Advisory Services offered though LPL Financial, a Registered Investment Advisor. Member FINRA/SIPC

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.