Topic: How To Invest

What is Pat’s commentary for the week of February 23, 2021

Article Excerpt

As we’ve said before, it’s a mistake to let predictions guide your investing. It’s even worse, however, to base investment decisions on what you might call “compound predictions”—those that have two or more related parts that all have to pay off for you to win. Let me give you a recent example. This past summer, a number of investors told me they were staying out of the stock market for a couple of reasons. First, they feared that candidate Joe Biden would win the U.S. presidential election; second, they believed that President Biden would raise taxes and support measures favoured by Bernie Sanders and other left-wing Democrats. It’s not as if these investors all had strong feelings for or against Biden or Trump, or their policies. They were mainly worried about the uncertainty that the election might bring to the economy and the stock market. In the months leading up to the election, these investors stayed out of the market. Stock prices kept…

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