You hear it every day if you are paying attention to the news. Your neighbors and coworkers are likely talking about it (over Zoom, of course). And, if you are being honest with yourself, you probably believe it’s true.
(Yes, even despite this recent volatility.)
We are witnessing what is being called the quickest bear market recovery in history. But are things really true if they are only partly true? The reality is that:
We picked this chart (adapted from BCA Research) as our “Chart of the Month” because it says a lot in just one glance.
Because when we don’t have the full truth, we sometimes make decisions that we otherwise wouldn’t. Here’s the top mistakes we see investors make in these situations:
1. Get frustrated. You hear all this great news, look at your own portfolio’s returns, and get frustrated that your returns aren’t as great as what you are hearing about.
2. Chase returns. You start looking into what changes you can make to your investments to get the same great returns you keep hearing about.
3. Go all in. You start to concentrate your portfolio in the stocks, industries, or sectors that are the source of these great returns.
Here’s a headline that you’ll want to pay attention to:
So, if you’ve felt tempted to do any of the above, we suggest you follow the plan that serious investors take.
Have additional questions about this topic? Want to know more about working with an independent fiduciary like Heritage Financial? Let’s Talk.
Kristin Castner, CFA
At Heritage Kristin is responsible for overall marketing strategy, with a focus on communicating the firm's message to clients and prospects and creating outreach programs to engage clients, partners and prospective clients.