Dear Reader,
I don’t know.
These words might not be the words you want to hear from your financial and investment advisor, but they are true…
“Is the coronavirus going to push equity markets even lower? - I don’t know
“Is it a good time to buy?” - I don’t know
“Should I move everything into cash until this is over?” – I don’t know
For me, these words are of crucial importance. They are the first words I say to myself each morning before I open my computer. They are the words I fall back on when I look at short-term market fluctuations (up or down). They are the over-arching theme for how I manage investment portfolios.
I. Don’t. Know.
The reality is, no one knows – not Warren Buffett, not Jeff Bezos, not anyone. If we accept that no one knows, then you have to stand firm on your own “I don’t know”. This means you also have to stand firm on the “I don’t knows” of others. You have to permit “I don’t know” to seep into your every fiber. You cannot allow any “I knows” to even remotely creep into your decision-making processes – whether they are conscious or unconscious.
If you can admit to yourself “I don’t know”, then you are left with no choice but to revert to your framework for investment decision-making. It takes the guesswork, the emotion and the intuition out of the equation and allows you to make clear decisions using proven and effective processes.
If you do not have a framework for investment decisions, then either you “know” (I’m skeptical), or you should go find one…
Any good financial and investment advisor has likely already articulated this to you, so if you’re already working with someone and need a refresh on the investing framework in place for you and your portfolio, it might be best to revisit this with your advisor and spend some time understanding how your portfolio is positioned from a bird’s eye view so that you can be sure you’re on track to meet your financial goals and objectives.
This of course is just a suggestion – and what do I know…