In the midst of all that's gone on in the economy and markets in the recent days and weeks, it's easy to lose sight of the fundamentals.
And I'm not talking about a company's financial fundamentals like P/E ratios and such.
I'm referring to the fundamentals of how our economy and investing both work.
Our economy, as great as it is, will always cycle through alternating periods of boom and bust. I think you know where in that cycle we find ourselves today. Unfortunately, you can't have the boom without the corresponding bust. The same is true in investing.
And investing, while simple in concept ("Buy low; sell high"), isn't easy. And it is especially challenging in circumstances like we find ourselves in today.
As a quick refresher, here is my investment philosophy in its most basic form:
a. Diversify, Diversify, Diversify b. Keep your costs and taxes low c. Behave, Behave, Behave
I find that it's the "Behave, Behave, Behave" that proves most challenging because our emotions and often our "gut" are screaming at us to get as far away from this mess as possible. We want to seek shelter and wait for the storm to pass. But time and again throughout history and prior economic downturns and bear markets, running for the exit signs has proven to be very costly in the long run.
But don't just take my word for it, please check out the following articles and other resources that will help put our current situation in better perspective Brett Arends Article Recent Warren Buffett Interview
Investment Scientist Blog Post Comparing Today With Great Depression Switching To Cash May Feel Safe, But . . . As Dire As The Times May Seem, History Isn't About To Repeat Itself
And please feel welcome to pass these resources along to any of your friends and family that could benefit from some better perspective amidst all the noise and excitement.
Have a great weekend,
Russ