Investors hate uncertainty. And uncertainty has been rife as the country has bumbled its way through the uncharted territory of the current pandemic-induced recession. Let’s be clear: no one knows exactly how long the pandemic or the recession will last, just as no one can predict the next market correction. Layer on the Presidential election and it’s no wonder that stock markets ended October with a whimper.
The lack of clarity in the near-term certainly causes many investors to worry, or, worse, to make ill-advised moves to their portfolios. However, one antidote to frustration-generated action is to remember that no matter how messy the market seems from day-to-day and week-to-week and month-to-month, the year-to-year and decade-to-decade outlook remains positive.
As the old adage goes, “Focus on what you can control, and don't waste energy on the things that you cannot.” You can control the construction of your stock portfolio, identifying no more than two dozen companies you can find that represent the best prospects for total return over the long-term. Once the construction is done, focus on maintenance—there’s no need to tear down and rebuild with every change of season. You can’t stop the rain from falling, but you can make sure your roof is sound.
Reprinted from the November 2020 issue of the SmallCap Informer.
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