I just finished Rational Expectations: Asset Allocation for Investing Adults by William Bernstein.
If it wasn’t my job, you could scream ‘nerd alert!’ (But it is. So you can’t.)
Great book BTW, but definitely not for the casual reader.
In it, he appropriately describes 3 different groups of investors which really resonated with me.
Which one do you identify with?
“Group 1: The average small investor, who does not have a coherent asset-allocation strategy and who owns a chaotic mix of mutual funds and/or individual securities, often recommended to him or her by a broker or advisor. He or she tends to buy near bull market peaks and sell near bear market troughs.
Group 2: The more sophisticated investor, who does have a reasonable-seeming asset-allocation strategy… but who falls victim to the aircraft simulator/actual crash paradigm, loses his or her nerve, and bails when real trouble roils the markets.
Group 3: Those who do have a coherent strategy and can stick to it.”
If you’re reading this, you’re probably in Group 3. (All of our Financial Zen Members are.)
The market’s up 18.6% from the recent low on June 16th.
I don’t know if that signals an end to the 2022 carnage or if it’s a head fake.
What I DO know is that it doesn’t matter.
If you stick to your strategy, neither carnage nor head fakes nor bottom-bounces will impact your decision-making.
