We all want answers to unknowns… It is only human. We seek out “experts” who oh so gladly opine about what is yet to come. We hope these “experts” can remove the uncertainty and allow us to avoid unnecessary risk. We crave clairvoyance.
Seek First to Understand
Investing, at its core, is an act of faith in the future – a future that is unknown. What could possibly be more scary than that? Perhaps this is why so many investors fall prey to the “clairvoyance canard”. Brokers, ahem… “advisors” provide assurances that their analysts are indeed actual wizards, able to predict the future. Mind you, no one else can forecast the future, but they have managed to “break the code” and you, dear customer / client, feel privileged to be the beneficiary. Don’t buy it.
Instead, start by understanding what we know (market history); what we don’t know (exactly what will happen in the future); and a reasonable approach for melding one into the other. You want to avoid trying to outguess the markets and instead focus on long-term investing. Above all else, you want to accrue what the capital markets provide over time, real (above inflation) investment returns.