Like many of your fellow investors (and financial professionals for that matter), you’re plugged in enough to read and respond to the market, but you might struggle to overcome human nature when things become uncertain.
In most cases, investors and financial professionals just stampede with the herd. It’s largely because they don’t understand the economic forces at work and the emotional tendencies that influence our complex financial system. But when you know better, you can do better. Doing better means increasing the visibility of what matters and creating an investment game plan that is risk minded and enables you to be cautious when others are greedy and see opportunity when others see fear.
To get started on doing better, you need methods for cutting through the distracting and meaningless noise in order to focus on the issues that really matter and determine what to do next. There are important questions that can help provide clarity. Are we above the long-term growth trend or below it? How much are we paying for the assets we are buying? Where are we in the debt cycle? Where are interest rates? How do they compare to others around the globe? Where are we in the business cycle? What are recession-watch indicators signaling? Filtering your choices through these questions and more will elucidate the right moves for you and your money.
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