Key insights
- The author argues that constant crises are a normal market condition and that investors should not be deterred from investing due to ongoing concerns. The market's ability to close green despite unresolved issues suggests that investors find the level of risk acceptable at current valuations. A long-term investment strategy is necessary to benefit from compounding gains.
I keep seeing redditors doom-posting about everything from private credit illiquidity, to rising gas prices, to yen carry trade, etc.
I follow finance news. I don't recall a single time we weren't facing some sort of crisis that could theoretically cause equity valuations to implode.
Yeah, we're facing potential crises right now. The point is we almost always are in some sort of crisis. Stocks still tend to go up.
It's silly to think that the market should be red every single day, or continue trending red just because the current crises are unresolved.
A year from now there will be a new crisis making headlines and people will be posting to "freak the fuk out and panic sell everything, it's so fuking over", like usual.
To clarify, the market wasn't insane to close green. Investors weren't dumb, thinking the crises had been magically resolved. Investors decided the level of risk from current crises was acceptable given current equity valuations.
There's always a crisis to doom and gloom over. If being in a crisis deters you from investing then you're not going to spend enough time fully vested in the market to benefit from compounding gains.