Investment Markets are Predictably UnpredictableSubmitted by HearthStone | Private Wealth Management on August 18th, 2015
APRIL 13, 2015
Investment Markets are Predictably Unpredictable
“Knowing what you don’t know is more useful than being brilliant.”
—Charlie Munger, Vice-chairman, Berkshire Hathaway, and business partner of Warren Buffet
We know successful investing over the long run isn’t simple. If it were, everyone could do it. Market downturns and corrections are part of investing. They are to be expected, if not embraced.
The last few months haven’t been easy. Many stock and bond investments are down for the third quarter of 2014. Some measures are down a small fraction. Others are down as much as eight percent or more. A fairly typical global portfolio balanced with both stocks and bonds fell about two percent over the three months. To make matters a bit worse, the market decline has continued thus far into the month of October (as of Oct 10, 2014).
At HearthStone, we know one thing for sure: we don’t know what the market will do in the short-term. Therefore, we have plans in place for up, down, or flat markets in the short-run. We don’t worry about the temporary fluctuations.
Over the long term, we feel comfortable recommending investments we think are likely to benefit from continued economic recovery, and eventually, economic growth, around the globe.
We also know there are times when a perfectly fine long-term plan seems at odds with what the markets are doing in the short-term. We believe strongly that a disciplined approach is best. That means that we will stick with the plan even when it is uncomfortable. This approach is more likely to enable our clients to meet their long-term investment objectives than one that attempts to avoid such discomfort by trading in and out of the market.
If you’re feeling uncomfortable because of the recent market fluctuations, call us. We will be happy to review your plan with you. We’re here to help you through all phases of the market, good or bad. That’s one thing you can count on!