Unpredictability vs. The Market
The market went down 500 points today. The pundits tell us the market is gonna continue to go down. Inflation is rising. Interest rates are going up. Get out of the market. Other pundits tell us inflation has already peaked. The market has already discounted the fact that the fed is going to continue to raise rates.
Prices are lower. Start to think about getting back into the market. The one thing we know for sure nobody has any idea what the market is going to do next. To quote Peter Bernstein, an American economist, forecasts create the mirage that the future is knowable. The future is not knowable. However, we can look back in history to periods of time that rhymed with what's going on now, where interest rates were rising and inflation was high, but there's just too much randomness in the world to know what's gonna happen next. War is random and that can disrupt supply chains. Weather is random and that could disrupt availability of energy product. Viruses are random and we've all learned that that can shut down the world. It's really just too hard to predict all the variables that will impact movements in the stock market.
But there are things we can predict and control. We can make sure that we have enough emergency cash in the bank for unexpected expenses in the coming. months. We can make sure that we have stable assets, bonds, or CDs to cover our known expenses in the next three to five years. And we can make sure that we don't need to touch what we do have invested in the market for at least five years, if not longer, so we don't need to sell out during a market bottom. if you would like a plan in place, so you can deal with this volatility with less anxiety, please reach out and give me a call. My name is Laura Rotter of True Abundance Advisors, and I'd love to help you use your money to create meaning in your life. Thank you.