If we take 100 steps back, the stock market does hills and valleys around a persistently rising trend line. The biggest mistake I see investors make, by far, is trying to time those hills and valleys. With the news constantly telling us all of the things wrong with the world, who can blame them!
If we try to build an investment strategy from the outlook suggested by the news, our strategy would change on a daily basis. The wise investor uses a philosophy, not an outlook. What’s the difference? While outlooks change all the time, philosophy doesn’t change based on circumstance. We do not give up control of our investment strategy to unpredictable global events. I believe that the market will continue to rise and fall around its increasing trend line in an unpredictable manner. This philosophy is the lighthouse in the storm. It doesn’t move because of the waves. Without it, we are swept off to sea without direction. We use this philosophy as a framework to invest based on your financial goals and be proactive about managing risk. Outlook based investing = reactive = failure Philosophy based investing = proactive = success