Welcome back. I'd like to say it's nice to be back in Melbourne having returned from Bali, but I can't. Really. I mean, 6:30 am it's 26 degress, sunhsine, not a cloud in the sky, morning runs, massages, Bintangs, nasi goreng, and a few client calls - it was pretty good.
Doesn't matter where you are in the world, global markets continue to remain volatile. We've spent a bit of time updating our Financial Hanbook, which you can download here.
Financial markers are bracing for a recession, it's clear in the data. We're experiecing something like nothing before. There's not much positive vibes going around right now, so allow me to take a different angle here. Bear markets don't last forever, we all know this, it's a fact. The fact that markets are bracing for a recession means the market has priced in a recession, how severe though, we won't know. In fact, we won't know we're in a recession until after the fact. Buying opportunities such as these don't come around too frequently, in fact, as frequerntly as we have negative years - 1 in every 4 years. The data show us that the longer these bear markets go on for, and the larger the decline, the greater the future expected return.
Markets are noisy. Markets are volatile. Markets are unpredicable. Markets are energetically and emotionally draining. But all in the short-term. Longer term, if you can convince yourself to look through this lens, markets are predictable, far less volatile, and do a pretty good job in pricing itself and provide a pretty decent return.
Without the rain, there are no rainbows. Without the falls, there are no rises. This is the price of admission. Stay focussed, stay clear minded, and remain unemotional. It's hard, I know, but its what seperates the good investors from the rest. Godspeed.