In this episode we discuss why you should stay the course when it comes to the stock market.

2022 was one of the worst years ever for financial markets. The S&P 500 was down 18%. We are hard-wired to assume big losses will be followed by additional losses , just like we assume big gains will be followed by additional gains. Neither of those are necessarily so because the stock market is so emotional and hard to predict.

Even the pros have no idea what will happen next in the market. A list of S&P 500 year-end price targets from 16 of the biggest Wall Street firms. As of this podcast in August of 2023 the S&P 500 is trading at roughly 4,515 and so far 15 of 16 firms have it wrong.

Wall Street strategists get pessimistic when stocks are falling and optimistic when stocks are rising. Sounds like they jumped on the bandwagon.

The truth is it is really difficult to make predictions about the future, especially as it relates to short-term movements of the stock market. When stocks fall, our emotions make us think they will fall even further. And when stock rise, our emotions make us believe they are going to rise even more.

What can you do? Be a long term investor and stay the course.

Link to Ben Carlson's great article. Do yourself a favor and read it.

https://awealthofcommonsense.com/2023/06/this-is-why-you-stay-the-course/