Jack Bogle was fond of saying, don’t just do something, stand there! At least in terms of your investments.Many of the most successful long-term investors devise a plan and stick to it, no matter the larger environment.
This means using discipline and removing emotion from investing.Mike Piper, CPA, from the Oblivious Investor, answers a question about investing during tumultuous times like these.
It’s important to make a distinction between the stock market and recessions. For a few reasons, a recession happening over a particular period does not necessarily mean that the stock market would perform poorly over that period.
Second, GDP is concerned with a broader group of entities. The stock market is the market for publicly-traded corporations. So by definition it’s only concerned with publicly-traded corporations.
Finally, the most important distinction, for our purposes, is that the price of a stock is essentially a prediction. It’s a function of how much the market collectively expects that company to earn.