Key insights
- The author observes a disconnect between negative news sentiment and actual S&P 500 performance, cautioning against emotionally driven investment decisions. They highlight the historical choppiness of midterm election years and advocate for a disciplined, long-term dollar-cost averaging (DCA) approach, suggesting that severe market crashes are rarely foreshadowed by prolonged negative news cycles.
I wanted to post about what I think is a gap between what is happening in the news and what is reality.
I see many folks on here concluding a crash is imminent, many signals are flashing, there is war, makes sense to me. the issue is that as I'm writing this the s and p is down 3.85% YTD, I think that gap is dangerous between the market returns and what people are sure is going to happen. we all know what happens when everyone is saying the crash is coming but the market is just chopping.
mid term years are historically choppy so I wouldn't doubt we see a correction of some sort, but I wouldn't hold your breath for a covid level 35% market meltdown. I've been in the market 15+ years, I don't trade and just DCA broadly long term. but I keep up with the market and I can tell you that those levels of crashes don't have months of news telegraphing them.
the purpose of my post is to say that if you are emotionally invested into the news like me, don't let it impact your investment plan. I see lots of folks here that are very emotional over the news and using it to dictate their investment decisions., it rarely ends well. DCA long term has worked for 50+ years and it's the only reliable investment strategy that works.