I will be on the road for the next couple of days, so the blog will be taking a brief nap. No worries though, I am not fleeing the markets. Just stepping away for a short while and will return soon, refreshed and ready to dive back in.
On another note, as always, I prefer to focus on the positives despite the rumblings of another market crash beneath the surface. That does not mean everyone is smiling. One client recently called me rather upset after some of his positions were hit by the ongoing conflict in the Middle East, reducing a portion of his profits. He told me I should have anticipated the war. I replied that Trump forgot to ring me beforehand to let me know it was coming.
The episode reminded me that many investors still expect someone, somewhere, to know what is coming next. Markets, economies, elections, central bank decisions and now wars as well. Unfortunately, investing does not work that way. If it did, we would all be spending our days on a private island somewhere instead of staring at charts and economic data.
The reality is that surprises are part of investing. They always have been and always will be. Our job is not to predict every unexpected event. Our job is to manage risk, stay disciplined and position ourselves for opportunities when they arise.
Predicting short-term market action is a tricky business. Say you call for a 5% pullback, only to watch the market rally 10% first and then finally drop 5%. By then, the market could still be sitting higher than where you started. It is a bit like waiting for a sale only to discover the discounted price is more expensive than last month’s regular price.
The markets will continue doing what they do best, confusing both bulls and bears. I will be back soon.