the right way to invest blog
Have you been following the advice, or maybe thinking about following the advice, of a stock market guru on your favorite news channel? Is he saying “this is the next Amazon” or is she saying “Get out now while you still have any money left!” Stock market gurus and professional stock pickers are just as good [bad] at predicting the future as you and me. Sure, they’re going to be right sometimes; when the outcome is up, down or flat, it’s not too tough to guess right. The main issue, however, is being consistently right, and no guru is consistently right. Are we reacting to a guru who guessed right or to a guru who guessed wrong? This short article expands on the psychology behind why us humans seek out those we think can predict the future – and how the reason for that mentality is because we crave certainty in an uncertain world. When we react to uncertainty, we could run into major problems that could seriously derail our retirement aspirations. Instead of being reactive we need to be proactive with an investment philosophy rooted in decades of academic research; an investment philosophy that says we can’t predict the future, but we can prepare ourselves for how we handle the unpredictable future. When we face uncertainty, we don’t want to rely on the so-called predictive powers of someone we see on TV, instead, we want to rely academics, research, and data because over the long-term – and remember we invest for the long-term, not the short-term – they provide the certainty we crave in an uncertain world.
Michael Pensinger, CFP® is Owner and President of Pensinger Financial, Inc.
He grew up in Park Forest, Illinois and now resides in Lemont, Illinois with his wife, two children, and two dogs. Michael serves as Treasurer on the Lemont Area Chamber of Commerce Board of Directors and he volunteers for the Lemont Open Space Committee. Read More