The Trouble with Amnesia
Last week an investment advisor Recommended that investors needed to erase their mistakes from their memory in order to be successful in this market. This might work well in real life - erase that powder blue tux worn to the Junior prom or the 20 pounds gained during freshman year at college; but investors need to stay aware of the past.
We understand the sentiment of wanting to forget, in that many investors are mentally imprisoned from taking risk due to the tech collapse in the early 2000s and the subsequent financial debacle of 2008. BUT (and this is a big but) investors need to learn from these mistakes and not shrink from fear.
We at Fagan Associates believe that a huge subset of investors who should be stock/equity oriented are still licking the wounds of these bear markets and those investors maybe do need a dose of amnesia. The vast majority of investors need to deal with reality. That reality is that both bear markets happened, and even with those declines, investors choosing the stock market are much better off, in spite of the pullbacks, than investors who choose either cash or bonds.
Please note that all data is for general information purposes only and not meant as specific recommendations. The opinions of the authors are not a recommendation to buy or sell the stock, bond market or any security contained therein. Securities contain risks and fluctuations in principal will occur. Please research any investment thoroughly prior to committing money or consult with your financial advisor. Please note that Fagan Associates, Inc. or related persons buy or sell for itself securities that it also recommends to clients. Consult with your financial advisor prior to making any changes to your portfolio. To contact Fagan Associates, Please call 518-279-1044.