Betting on the Markets Being Wrong – Don’t Take Those Odds

A common refrain in investing is that news and expectations are already "priced in”. I often say this publicly and in individual client meetings. When clients are concerned about changes in the market and want to act on what they are hearing, I remind them that the market is ahead of the media rumblings and that snap financial decisions tend to sabotage positive financial outcomes. So, it is much better to hold firm with your investment strategy, that should be based on a sound financial plan, rather than reactively sell, because those who react are most likely reacting too late. And I’m not just guessing. I’m advising based on my experience and deep understanding of how markets work. The reality is that those who stay disciplined see much better performance than those who try to bet on market mispricing and make changes.

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Timeless Financial Tips #1: Repeat After Me: “It’s Already Priced In”

A key concern many investors have at the moment is the impact of Trump's tariffs on goods produced outside the U.S. on the markets. I'm hearing from those wondering if they should sell quickly to protect their wealth; their primary question is: What should I do with my investments? My answer (as it usually is when investors are concerned about the geopolitical impact on the markets): Stick with the plan because, by the time you become concerned, the markets have already pre-adjusted (i.e. it's priced in), so any reaction you take is too late.

Continue ReadingTimeless Financial Tips #1: Repeat After Me: “It’s Already Priced In”