The Art of Zen Thinking
Two monks were travelling across the country and came to a river with a strong current. They noticed a young woman in distress; unable to cross because of the current. The elder of the two monks went up to her, lifted her and carried her over to the other side. She was grateful and they parted ways. The two monks then continued on their journey.
In the evening the younger monk could not take it anymore and blurted out, “Sir as monks, we can’t touch women, yes?” The elder monk answered “Yes, brother”. Then the younger monk asks again, “But then Sir, why did you carry that woman earlier on?”
The elder monk smiled at him and replied ”I had already put her down long time ago, but you are still carrying her; in your head.”
Much like the story of the monks - very often we get hung up over a scary story and keep worrying about it till no end.
At the moment, many investors are worried about the possible threat of a recession. The media, investment strategists and company CEOs have all been issuing negative outlooks about the economy. The communication from hawkish central bankers have offered no respite.
But like the younger monk, are we getting hung up on something that could be more minor and will pass faster than we think? Recent employment data was very strong and falling gasoline prices have boosted consumer confidence. Core durable goods orders jumped, which is a positive sign for factory activity. Surprisingly, new home sales also rebounded strongly. The agency which makes the recession call - the NBER highlighted that despite slowing growth, other data still remains strong.
It is inevitable that a recession would eventually occur. Whether it is tomorrow or 5 years from now, if you are investing in a way that enables you to capture all available market returns without having to make forecasts, then the threat of a looming recession or job losses or wage decreases or a whole bevy of other worries should not sidetrack you. Stock markets have already been trading between -15% to -25% (for major indices) in anticipation of a slowdown. Bond markets and currency markets have also moved too. If you are thinking of shifting your portfolios, then it is already too late.
As Peter Lynch, manager of the famed Magellan Fund, once said - “Far more money has been lost by investors in preparing for corrections, or anticipating corrections, than has been lost in the corrections themselves.”
If you want to start investing but have the following questions:
How will recessions affect my returns? Should I wait to invest?
How can I invest in the current market situation? When is the best time to do so?
How can I invest in a reliable and predictable way?
Do not hesitate to reach out to us for a review meeting. Due to the unique market conditions that we are in, we have specially dedicated a team to address such concerns. Click here to schedule a 30-minute pre-discovery sessions where we can have a chat with you to understand and better assess if we are able to add value to you.