I was reading an article that was evaluating the validity of blog post by Ben Carlson, portfolio manager at Ritholtz Wealth Management LLC, where he stated, “investing when things look bleak remains a profitable strategy.”
At first blush this seems counterintuitive. But, having lived through some of the fun of the past 20 years: the dot.com bust, 9-11, the housing crisis and now Covid-19. I have seen the market act unlike most predicted.
So, in other words, when unemployment is high, stocks tend to soar, and when it’s low, gains are relatively paltry. At least that’s what history has shown us.
“It’s counterintuitive that the best returns would come from investing when the economy is getting body-slammed,” Carlson wrote. “But being uncomfortable when investing is typically a good sign.”
I put some money into the S&P 500 when the market initially crashed with Covid-19 and I am up 25%. Ther0e is opportunity in chaos.