Wisdom from Forrest
When I think back to Forrest Gump, I immediately remember his immortal words:
- Stupid is as stupid does.
Forrest was reminding us that, ultimately, it’s our actions that speak the loudest. While Forrest never openly opined on the stock market, I think he would have said something akin to this:
- Normal is as normal does.
In other words, if you see the same thing over and over, you can assume that it’s normal.
The Sky That Did Not Fall
As long as I’m talking about Forrest Gump, I might as well bring in Chicken Little. You remember, the fowl of “the sky is falling, the sky is falling” fame? Well in March of 2020, Chicken Littles were all around us prognosticating how the stock market was destined for miserable times.
And here we are, a bit over a year later, and they could not have been more wrong.
The Chicken Littles show up EVERY time the market is down
screaming about how “this time it is different."
The thing is, Chicken Littles show up EVERY time the market is down screaming about how “this time it is different.” Though they’ve yet to be right, I’m confident that they will continue to scream their heads off.
Why I have constant optimism in the future of investments
I’ve said it before and I will say it again: I have constant optimism in the future of investments for two reasons:
- I believe that, in the future, we will have more people on this Earth.
- I believe that, in the future, the world economy will be bigger.
Couple the above with increased access to information the world over, and I do not see how the “investment pie” can do anything BUT get bigger!
That said, I’m sure there is another Chicken Little out there who will scream about me being wrong. Maybe so—but I doubt it.
Stay the Course
It’s well documented that the most important thing, when it comes to investment success, is investor behavior. And the most important behavior is to stay the course/stick with your plan.
I’m NOT telling you where to invest, how to invest, or what to invest in. I AM telling you that you better have a plan and stick to it if you expect to have success as an investor. If you choose to forgo developing and implementing a plan, don’t be surprised when things turn out poorly.
Critical to sticking to the plan is recognizing that volatility occurs regularly in the market. As does long-term growth. And you can’t have the latter unless you endure the former.
Turning back to Forrest on investing (or at least what I would like to have had him say):
- Normal is what normal does.
He’s telling you to stick to your guns/stick to your plan. What if you decide you don’t like this approach? Well, then I think you need to look back at what Forrest DID say:
- Stupid is as stupid does.
The attached article provides a bit more perspective on what you can expect to see in the market, and it is definitely worth a read.
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Photo credit: Ray S. on unsplash.com
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