If we all were able to know where the market was going to trade, we’d all be rich.
But that’s not possible, not even with the best of inside information.
In this story, from the Humble Dollar, we take a look at several recent predictions from so-called “experts” and understand why they ultimately shouldn’t matter to you as a long-term investor.
You can do that by paying close attention to your portfolio’s asset allocation. The key is to have enough funds outside of the stock market to carry you through a typical stock market downturn, which might last up to five years.
The next obvious question: Are corporate profits guaranteed to rise over time? Again, there are no guarantees, but there are reasons to expect that’ll be the case. The most basic building block is population growth.
A related concept is productivity. Corporate profits grow because companies, on average, become more efficient each year. Even if sales don’t rise, a company could still see its bottom line increase.