Earlier this month I was reading a quarterly market update from a financial institution that was citing leading economic indicators that were all pointing to a looming recession and likely market decline in the near future.

Later that same day, I came across a chart from a market strategist at a large financial institution that cited the fact that since 1950 when we reach a 52-week high after more than a year without one, the market has been positive 1 year later every time…

There are significant costs to poorly timing the market. However, this does not stop many investors from trying since there can be significant benefits to getting it right.

There are lots of data points around why it’s so difficult, but I think the most underestimated reason is that even if we can identify the potential triggers of a market collapse, we often don’t know how or when they will be resolved…

As an investor, you are likely familiar with the concept of owning a balanced portfolio. However, one strategy that has been well-documented over time to outperform a perfectly balanced portfolio is a “value tilt.”

A value tilt approach to investing is a strategy that involves overweighting companies with a lower price-to-earnings (P/E) ratio than the overall market. The rationale behind this strategy is that these undervalued stocks have the potential to deliver higher returns in the long run as the market corrects its mispricing…

One of the most challenging aspects of long-term investing is that years of growth can be wiped out in days or weeks. While every stock market cycle is different, over the past 100 years, it generally has looked something like this -

Small incremental growth followed by a few small waves of panic resulting in declines of 5-10% each year, a few shocks of 20-30% every decade, and a complete meltdown every few decades. It can be tempting to try to avoid the big shocks or meltdowns because the reward for doing so is large. But what if you are wrong and what you think is a meltdown is only a shock, or what you think is a shock is only a small panic? What is the cost?

I was recently listening to a podcast hosted by a few advisors who are also popular in financial media. One of them had recently been brought on by several media outlets to talk about one of their predictions for 2023.

As a way of establishing credibility, the media outlets cited one of his 2022 predictions that he got right – the S&P will have its worst year since 2008. Financial news outlets had subject lines that read something to extent of “this analyst who forecasted market downturn in 2022, now says...”