Welcome to Episode 24 of Retire Me!
On this week's episode, we wrap up the series Key Questions for the Long Term Investor. Today we look at the question: Should I make changes to my portfolio based on what I am hearing in the news?
The narrative in most financial journalism is almost always biased to the negative. To illustrate this, I did a google search on the terms "bull market" and "bear market". See below:
It would be reasonable to think that the markets are scary and bear markets happen all of the time. But historically, bull markets are more frequent and longer-lasting than bear markets. See below from Investments Illustrated:
When you hear about bear markets in the news, remember that
1. Bear markets happen often (once every 5 years on average)
2. Their causes are always unique, leading us to worry that "this time is different"
3. We will find a way through it because we always do
4. Try and turn off the news. At least, the financial news.
Have a great week!