Message from Jon
FOMO: Fear Of Missing Out is not the punchline of a bad joke. It is a real issue with investors of all walks of life. FOMO happens whenever we see a rally of significance in the markets that catches investors by surprise. This triggers a "get on board or lose out" response, and they end up investing at highs hoping they will gain like their friend, buddy, or confidant and not be on the outside looking in.
Early in my career, I was warned by a mentor that this phenomenon was real and not to react to it, but I failed to understand why anyone rational enough to understand investing would fall prey to this and dismissed it. Over my nearly 20-year career now, I have witnessed some fairly intelligent investors fall prey to this emotional response to their money, and it still dismays me. In spite of everything they read, they still believe that buying the markets AFTER it has seen an all-time high is hope that it will still go higher.
Insert warning here!
Investing is, more often than not, counter-intuitive in its nature. The discipline it takes to achieve success cannot be underestimated and is not really seen until decades have passed-not quarters. I am beginning to think Buffett was correct when he said that most "Most people get interested in stocks when everyone else is. The time to get interested is when no one else is. You can't buy what is popular and do well."1 I have forgotten how many times we have bought investments, and when they initially decline, Mr. Investor gets impatient and wants to sell only to look back 12-24 months to find out that what was sold at a loss would have been a sizable gain had they just been patient and trusted the criteria of the purchase.
Develop your comprehensive plan, stick to your plan, and forget about all the noise out there that doesn't have anything to do with your plan!
The trends in the markets seem to remain strong and intact. We are witnessing a corrective sell-off due to the recent Iran airstrike and its "implications," but in spite of all the internet hypotheses and rumors disguised as fact, WWIII is not on the horizon, in my opinion.2 If you know your history, wars are good for the markets anyway.
2020 is sure to be an interesting year with the election, Trade war resolution prospects, and Fed Policy decisions-not to mention any other issues that pop up and make the headlines. For us, we will stay our course, remain diligent, follow our data and indications, and continue to guide clients toward their financial goals.
Till we speak again, enjoy...January!
Concerns About Oil
WEEKLY UPDATE - JANUARY 6, 2020
The Week on Wall Street
Stocks descended from record highs Friday, as traders reacted to a U.S. drone strike that killed Iran's top military officer. Oil prices rose more than 3% following the breaking news.
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