Listeners have been beating down our doors with one question. What will the market do in 6 months? How about a year?
Earnings reports are coming out and the market doesn't like what it sees. All sorts of debates on Capital Hill are raging. Unemployment is still high. Should we batten down the hatches? Not just yet …
There are plenty of places to go on the Internet and see what people think the market is going to do. Turn your TV to Fox News, CNN, Bloomberg, or MSNBC. You will see analysts of all backgrounds telling you what to buy, what to hold, and what to sell immediately. You want the true prediction….
In 2 words, the market in 6 months will be…
Nobody Knows!
All the fortune tellers you see on TV and read on the Internet are making their (educated?) predictions for entertainment value. They keep you glued to their channel by making you fear financial Armageddon or to make you feel good with greed about the current bull market.
To hear the Smart Money Radio Show segment focused on this topic, Please Click Here! (about 7 minutes long)
To hear the full Smart Money Radio Show where Bruce discusses this topic and more, Please Click Here! (about 25 minutes long)
Dear Bruce:
ReplyDeleteI remember the market crash of 1986 (No cracks about "the old guy," please).
The morning the market crashed I was in a room full of financial planners and stock brokers, many of whom where visibly shaken by the 800+ point drop in the Dow. That morning I had purchased 100 shares of a blue chip stock, and it too dropped like a cornerstone in a pool of ether, but I wasn't shaking; I wasn't worried. When my turn came to speak, I asked the group how many of them had sold out their investments that day. Not one person raised his hand. Then I pointed out that from where I was sitting nobody in that room had lost a penny, because the losses were all on paper. The key is to invest with a plan and to make adjustments as needed, but not out of panic. Months later when I sold my investment it had turned a nice profit and helped fund my daughter's college education.