“What do you think the market is going to do?”  This question is proposed to me quite often and the brutally honest answer on the tip of my tongue is “I have no idea.”  Unfortunately, an answer like that doesn’t enhance my credibility as a financial expert.  Another one that runs through my head is, “who cares?”  That will probably come off as rude and won’t do me any favors in my quest to broaden my network and build a strong reputation. 

The reality is that both of those answers are as truthful as you can get and honesty is a very important attribute of an investment advisor.  However, the person asking the question wants more than that.  The real answer is that I read a lot of articles and opinions on a daily basis regarding the market and the economy.  There are some very well thought out arguments that the market and the economy are on strong footing and are going to continue to grow.  Those articles leave me in a very positive state and tempt me to move all of my clients’ money to 100% equities.  But then I read an article that is just as well thought out and it argues that the market and the economy are in terrible shape.  2008 is going to be a picnic compared to what is ahead.  These articles make me want to move all of my clients’ money to cash and start to stock up on canned goods. 

So who is right?  Nobody really knows.  Even if they are telling you they know, they really don’t.  All market predictions are educated guesses.  2019 is a very recent example and a perfect one.  The market had a very sharp correction in the fourth quarter of 2018 leading to a lot of pessimism and cautiousness in the 2019 predictions for the market.  Even the most bullish analysts on Wall Street did not predict the year we experienced in 2019.    2019 was just another reminder that you can’t time or predict the market no matter how smart you think you are.  This is why the best course of action over the long term is to develop a financial plan and put an asset allocation in place that aligns with the objectives of that plan.  There will be up markets and down markets throughout your journey.  However, if you maintain the proper asset allocation, you can ride out the bad markets and enjoy the good ones.  The one thing we do know for sure is that neither the good nor the bad times will last forever.  The equity markets have been and will continue to be a very effective way to build wealth over the long term.  We all need to stop getting so hung up on the short term.

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The views and opinions expressed herein are those of the speaker or writer and do not necessarily reflect the views of Alliance Wealth Advisors, LLC. All opinions are subject to change without notice. Neither the information provided nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. Past performance is no guarantee of future results. Diversification does not guarantee a profit or protect against loss in a declining financial market.