Five reasons to ignore stock market doomsayers

financial post ^ | May 8, 2015 | Peter Hodson

[Drango]

If you pick stocks completely at random you will do better over time than over 50% 95% of the professional money managers.

[ShadowAce]

Where did I mention my personal strategy? How do you know I haven't done exactly that?

I don't care where you go with your money. Like I said above--I have nothing to sell. I have no advice on where to go. But I can say with certainty that the market will crash harder than in 2008.

You have all summer to rsearch it.

[kjam22]

Which markets? Housing market? Precious metals? Currency market? Equities? Across all sectors? Soybeans? Secondary lenders? Federal reserve?

For me.... I never sell because of fear. The only time I sell is when I have something else I want to buy. When it makes sense to sell an investment and buy something better, or more strategically sound. I've managed my mother's estate since since my father passed away at age 56 in 1993. She hasn't worked and has done very well. And, I managed my mother-in-law's estate/trust all the way through alzheimers, memory care nursing homes, and eventual death. And I've managed mine and my wife's.

I've never sold because of fear. Because of the "I need to bury all of my money in the back yard" mentality. Fear drives most people. Its why the market goes down faster than it goes up.

[ShadowAce]

<shrug> OK

I have no fear. I know what's coming and am prepared. I'm not advocating selling out of fear--I'm advocating to be prepared.

[kjam22]

So what does “being prepared” mean to you?

[ShadowAce]

Not being vulnerable to a crash that is most certainly coming. It will be definitely larger than 2008, and quite possibly (though not certainly) the end of the American economy as we know it. How you want to ride that out is up to you.

Cash won't be worth anything, so the market will be worthless, and going to cash will be useless. Those are my opinions. This will not be pretty no matter how one prepares.

And we cannot stop it.

[kjam22]

Not being vulnerable to a crash that is most certainly coming.

So what specifically have you done to "not being vulnerable" to this upcoming crash?

[MaxMax]

I get my stock advice from Yahoo forums.

[ShadowAce]

I "invest" in hard items. Provisions to keep me and my family well-fed and safe.

I understand that most people think I'm crazy. I most fervently hope I am, but I really don't think so. I'm acting a lot like Jonah these days--spreading the word without much hope of belief or results.

Do what you think is best.

[kjam22]

Fair enough. My suggestion is this.... invest in those things that you think you'll need. But try to balance that perceived "need" that with a strategy that lets you not lose money. Any good investment strategy includes a plan to "unwind" the deal if necessary. As long as you can unwind the deal without suffering catastrophic financial loss....

Do what you think is best.

[expat_panama]

I can say with certainty that the market will crash harder than in 2008

Sure you can, and my bet is you're probably right because it happens every 40 years or so--

--and each time stocks continued to increase in value ten-fold over the next 3 decades. 

[kjam22]

That would be like a pattern.....

[Darth Reardon]

I heard a radio ad this weekend claiming zero risk, guaranteed 8% return. I would jump all over that if I was stupid enough to believe it.

[ShadowAce]

But try to balance that perceived "need" that with a strategy that lets you not lose money.

Agreed. I don't throw all my eggs into one basket.

But I know what is coming.

[ShadowAce]

There are deeper patterns to that chart.

[expat_panama]

wow, I googled “yahoo, stock, forum” and got a lot of different individual sub-forums, which do you find the most useful?

[MaxMax]

Sorry, I was being sarcastic. Don't go there unless you have money to lose. Due your own diligence.

[expat_panama]

deeper patterns to that chart

That's true, and there's a lot to be said for ignoring them.  The human eye has a bad habit of seeing patterns in completely random numbers (one example, nine examples), a very common investing mistake.  We don't want to overlook the strong, obvious, overwhelming pattern of American wealth creation which is a trend we can bank on.

[expat_panama]

lol —ya got me there! For quite some time I’ve looked of places to chat about investing and I keep finding the FR meets my needs. I keep looking tho.

[kjam22]

Investment and finance is one of my favorite topics to discuss as well. There are some savy investors on FR. But.... it seems they are WAY out numbered --- by the sky is falling, the aliens are coming, obammy is going to initiate martial law, a comet is going to strike the earth, terrorists are going to kill us all, the economy is going to collapse and never come back, and an EMP is going to knock us all back to the stone ages.... crowd.

People are fearful by nature. More people are afraid and negative these days than are positive, upbeat, and hopeful. I guess its the times. I don't know... maybe it has always been the human nature. I think its more prevalent these days because so many of us live comfortable lives. We fear losing that comfort.