![]() ![]() In expert tennis the ultimate outcome is determined by the actions of the winner. In his classic book, Winning the Loser’s Game, Charley Ellis gives one of my all-time favorite investment analogies: Minimizing mistakes is how you win during a market correction. When markets are going down, human nature takes the wheel while fundamentals are tied up in the trunk.Īnd when human nature takes the wheel it becomes much easier to make mistakes. ![]() ![]() There are people who want to pick the perfect hedge, nail the bottom, sell the rips to buy the dips and so on.Ĭorrections and bottoms look so easy in hindsight but it’s impossible to predict them in real-time. There is this desire to be a hero when markets get volatile. It’s counterintuitive but true.Īnd doing more is often even more damaging when it’s done at the worst possible times. Often times the harder you try and the more you do, the worse your results. Investing doesn’t necessarily work like this. Go to the gym on a regular basis and you can transform your body. Put in more practice and you can improve at sports. Study harder and you can get better grades. Trying harder and doing more typically leads to better results in many aspects of your life. When the markets go haywire, you really have 3 options on what to do with your portfolio: No one could have predicted the stock market would rise more than 50% in 20 despite the onset of the worst pandemic in 100 years. I could try to go through this list to provide data and context and opinions on each variable here but that’s not going to do much good since the only variable that matters - the future - is unknowable.Īnd even if I had the ability to give you the headlines in the future, you probably still wouldn’t be able to make much money on those headlines. This is not an exhaustive list but even if I missed a few things there is plenty to worry about right now. And we’ve been in a pandemic for going on two years now.The stock market is in the midst of a correction.There are labor market and supply chain shortages.Interest rates are finally starting to rise.We’re in arguably the craziest housing market ever.Inflation is at its highest level in 4 decades.Let’s do a quick rundown of some of the biggest worries for investors at the moment (in no particular order): The 3 Ways to Win During a Market Correction ![]()
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