Iwiz: The smart investor knows he can be fooled. The fool truly believes otherwise.
It is exam time and households are seeing feverish activity. Tempers are running high and anxiety is showing a steep climb on the Y-axis while the exams run slowly on the X axis. Performance phobia is gripping families and everybody thinks that scoring big is the only route to redemption. On the other side, politicians face their most severe test and the stock markets are more worried than politicians about the outcome. So, when an exit poll says there is going to be a change of guard, everybody dives into the market’s buying frenzy. Whether it is exams or politics, once the event passes over, people move on. The stock market behavior post-elections will be very similar. An investor must think beyond events. Events don’t create lasting wealth. Economic growth most certainly will. Betting on the return of economic growth is far safer than betting on election outcomes. That is the only way an investor will pass the test in wealth creation.
Build enough liquidity. Be ready to buy into a market dip.
