Today’s Practical Planning Tip will cover my outlook for the year, with a focus on what to AVOID.
Where at that time of year where every Wall Street bank and investment firm comes out with their predictions for the coming year. As I say every year, it’s important to keep in mind that these “predictions” are nothing more than educated guesses, wishful thinking, and marketing. They should not be viewed as investment advice and repositioning your portfolio solely based on anyone’s predictions is generally a bad decision.
In lieu of “predictions”, which in my view are pure silliness, my firm, ParkBridge Wealth Management, has put out a list of 7 mistakes to avoid in the coming year. Afterall, a major component of successful investing is averting the big missteps. Over the next few days, I will cover each of these items to avoid.
Today's focus is AVOID believing too strongly in the status quo: The concept known as “recency bias” is the tendency to place too much emphasis on experiences that are the newest in your memory, even if they are not the most relevant or reliable. In the investing world, this may mean assuming that 2023’s winning technology stocks will be the best performing sector in 2024. Alternatively, it may be an irrational fear of inflation or further increase in interest rates because those were the major investor fears last year. It’s important to be mindful that the latest news headlines and market performance won’t necessarily carry over indefinitely into the future. You should be prepared for different winners and risks in the market in 2024.