The likelihood of 2025 being all about Trump is real; brace yourself for a potentially wild ride. This does mean that market noise will be elevated, fueling uncertainty and consequently promoting volatile markets. At times like these, you must focus on your long-term goals.
“I’m more interested in the future than in the past because the future is where I intend to live“—attributed to Albert Einstein—speaks to a fundamental choice we all face—whether to fixate on what has already transpired or to focus our energy and attention on what lies ahead. Paul Hutchinson is a manager at Ninety One who recently wrote an article ‘Mistakes made, lessons learned‘, where he shares his significant investment mistakes, including chasing short-term trends. This is well worth a read.
Paul talks about times when his investments underperformed their benchmarks and peers over the short and medium term. The longer the underperformance continued, the more anxious he became. During these tough times, he started to think that doing something was better than doing nothing. However, the times he did act, he lived to regret it, as invariably it felt like his disinvestment initiated the recovery.
The most difficult thing to do is often exactly that—nothing! The lesson is that you should not alter your investment strategy unless it is incorrect at the outset or your personal or financial circumstances have changed. Absent such change, the basic rule is, “Do not let shorter-term market fluctuations and negative market commentary sway your commitment to your long-term financial goals.”
—oOo—
