The Fog of War: How to Look Past It and Capture Financial Opportunity

 

I’m an optimist. The danger of that is you can become complacent in a rising market. And markets do tend to rise steadily over time, more often than not. History suggests as much.

So my ideal situation as a wholesale fund manager is this:

  • You invest at value in good quality businesses.
  • Those businesses continue to grow their earnings.
  • Steady and growing dividends feature, with the yield rate increasing over time.
  • The market and share price continue to grow upwards.
  • It makes sense to continue to invest in this golden story.

But it is when markets panic and fall suddenly that an avalanche may result. When all the above expectations get shattered.

When fear takes over, there is not usually an orderly reduction. The bottom can fall out.

This is what we saw during the GFC. And again with Covid in March 2020. When investors were faced with a new phenomenon.

Can businesses survive when many are locked down from operating?

Turns out they can when governments flood economies with cheap money.

With this in mind, an optimist should thus deploy conservatively during times of recovery and greed. But keep an eye out for the next avalanche. With two strategies in mind:

  1. To pick up gold during the slide.
  2. To ensure positions are stress-tested for total loss.

Fortune and security will be more likely to come to those who can see the way events are about to unfold. And where they are going.

So, here are the three most urgent wealth trends unfolding over the next 12 months.

These are decisive global events that could have huge consequences for your financial well-being and happiness…

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Simon is the Chief Executive Officer and Publisher at Wealth Morning. He has been investing in the markets since he was 17. He recently spent a couple of years working in the hedge-fund industry in Europe. Before this, he owned an award-winning professional-services business and online-learning company in Auckland for 20 years. He has completed the Certificate in Discretionary Investment Management from the Personal Finance Society (UK), has written a bestselling book, and manages global share portfolios. Simon is a shareholder of Wealth Morning.


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