The Stock Market May Be a Pendulum, But Businesses Aren't
In the short run, the market is a voting machine but in the long run, it is a weighing machine.
— Benjamin Graham
In the first four months of 2023, the United G Strategic Fund — a core fund in our portfolios — shot up by more than +5% in January, fell by -0.43% in February, gained +0.99% in March, and ended April with +0.80%.
All in all, by the end of April 2023, the fund recorded a net gain of +6.61%.
But what about the value of the underlying businesses? Did their fundamental values fluctuate wildly between positive and negative in these 4 months?
Of course not.
As an investor, unless you can look past the short-term swings in prices, and focus on the long-term power of markets to create wealth, it will be difficult to stay seated and allow your wealth to grow. Our belief in markets come from decades of empirical research, and you can read more about it here.
The stock market can be a dangerous place if you do not understand how it works. Fortunes have been made and lost in it. Many assume that it is a place to make a quick buck and dive headlong into it without fully understanding the concept, processes, risk and return.
In the same way that you would not attempt a high risk activity such as sky-diving without professional supervision, investors can benefit greatly by relying on an adviser — having the peace of mind knowing that their plan is in the hands of a professional.
If you are worried about markets and are unsure if your investments will perform well going forward, or would like to have a second opinion on your financial plan, click here to schedule a chat with us. (Our 30-minute exploratory meeting is complimentary - either Zoom or In-Person)