CONFLICTING INVESTMENT INFORMATION

Do you notice how much conflicting investment information there is out there?

Here are some of the varying points of view that we all come across daily:

• You should own bonds because they are safer.

• Don’t buy bonds because they offer low investment returns and they can lose money like they did in 2022.

• Don’t buy funds. The only way to make money in the stock market is to get in early on companies like Amazon and Apple.

• Don’t buy individual stocks because even the best fund managers in the world can’t beat the index funds.

• Buy international stock funds because the economies in places like India and South America will grow faster than the US economy in the coming decades.

• Don’t buy international stocks because their returns are less than half those of the US index funds.

• We will get a “soft landing” in 2024 and it will be a big year for stocks.

• The US economy will be going into a recession in 2024 and stocks will decline by 30% or more as a result.

I could keep going and going with this list.  It seems that no one can agree on anything about investing or the economy.

Why is this the case and, more importantly, what is the average investor supposed to do with all this conflicting information?

There are several reasons why all these contradictions exist.

1. Nobody can predict the future with any accuracy or consistency.  It is just too hard to predict asset prices and the economy.  There are too many things (known and unknown) that affect financial markets. 

2. Often, the people who predict things just do it for media attention.  Bold and dire predictions get the most clicks and the most views.  Look for hidden agendas.

3. When it comes to investing guidance, people are relying on different facts or theories.  And some of those theories are driven by the interests of the investment industry and not the interests of the investor. 

I know that all of this stuff can be frustrating and confusing. Investing is hard enough as it is without all of this noise.

Because the investing world is so messy and full of conflicting information, it is important for you to:

1. Ignore short-term forecasts of things that are too hard to predict like the direction of the stock market, the direction of the economy, the direction of interest rates, etc.  Since investing is a long-term game, this is fine.  Stay focused on long-term data and data that is consistent.

2. Understand the data and the facts behind the advice.  Is it just an opinion that is grabbing a bunch of facts to support their opinion?  Or is the advice driven by sound and consistent data and logic that have held up for 30 years or 50 years or more?

3. Understand the motivation of the forecaster or expert.  Are they committed to truth and logic or are they going to benefit financially if you believe their assertion.  The Asset Allocation model based on risk-profiling is the financial lifeblood of the investment services industry.  If you believe in their model, then you will need their services and you will pay their fees to help you manage your investments. 

I, too, benefit when people buy my products and services.  But I can sincerely tell you that I am only doing this because in my decades of investing experience that I have not found any approach to investing that works nearly as well as my system.  It is not perfect, just better.  I invest all my own money according to my Beyond Buy & Hold system.  I invest all my hedge fund client’s money the same way.  If I could have found an investing approach that is this good, I would have gladly let someone else do it for me.  I love helping people achieve the comfortable and secure retirement that they deserve.

Happy Investing,

Phil

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Disclaimers The Beyond Buy & Hold newsletter is published and provided for informational and entertainment purposes only. We are not advising, and will not advise you personally, concerning the nature, potential, value, or suitability of any particular security, portfolio of securities, transaction, investment strategy or other matter. Beyond Buy & Hold recommends you consult a licensed or registered professional before making any investment decision.

Investing in the financial products discussed in the Newsletter involves risk. Trading in such securities can result in immediate and substantial losses of the capital invested. Past performance is not necessarily indicative of future results. Actual results will vary widely given a variety of factors such as experience, skill, risk mitigation practices, and market dynamics.