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Don’t Always Chase the Biggest Stocks

When I tell people what I do for a living, the next question I usually get is something finance-related.  Questions like, “so what’s your take on the market” or “are you invested in XYZ funds”?

If I had to guess, I would say 99.99% of the time my answer is the same.  And somewhere in that conversation, I might have included the comment, “I believe markets are efficient and unpredictable and will respond to whatever news is available at that time”.

This past week was a great example of markets responding to various headlines.  From the conflict overseas to pipeline concerns to CDC pandemic updates, we have seen markets fluctuate, and currently today (and yesterday), we are seeing markets rebound.

As history has a way of repeating itself, so do the markets.  Although many know this, I like to casually remind everyone that chasing stocks and trying to beat the market, is not a long-term winning strategy.

Dimensional Fund Advisors put together a quick and informative video that reiterates the value in broad diversification and long-term investing, versus picking and trading.

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