Everyone is Wrong

In my profession, I have to have an opinion, and I always do. However, when asked, I like to say “I am wrong; everyone is wrong.” Now, more than most any other time, we simply do not know what the future might look like over the next couple years. Any opinion about the economy or market can only be right through pure luck. Knowing this can help us avoid costly mistakes based on overconfidence in opinion, ours or others, and can allow us to not be so attached to the sometimes toxic news cycle.

Focus on what we know and trust in discipline

There is not much we can do to protect ourselves from the darkest of possibilities and, therefore, it serves no real purpose to spend time there in our minds. We do know that our country, our people, have overcome great difficulties in the past with amazing resilience. I think we can have some confidence in our ingenuity, our science, and our persistence.

There is a reasonable likelihood that we will have an effective treatment and/or vaccine and that this situation is transitory. This together with the actions taken by the government and the Fed to lessen the blow to the economy and to support the bond markets have lessened the likelihood of another “Great Depression.”

The hyperbole is intoxicating

This a great time for narcissistic pundits and pseudo intellectuals to predict the extreme. The media loves them because they generate eyeballs and clicks; these pundits win no matter what because if they are right, they are a genius, if they are wrong, no one remembers what they said. The media is toxic and polarized.

I recommend not being attached to the news cycle and when consuming news, that we bias sources that are as independent as possible. I personally find the Wall Street Journal, Bloomberg, and the Associated Press to be more balanced and appropriate for consumption. Confirmation bias is the enemy of good decisions and healthy news consumption.

There is a freedom, even a comfort, in accepting we can be wrong

If we can accept what we do not know, focus on what we do know and maintain investment discipline, we can relax more into our present reality, make better decisions, react less, and be more present to those we love.

Yes, we need to make decisions based on assessments of probability and we need to try to understand more deeply this changing world. But if we accept that we and others are likely wrong when forecasting the market and economy, and we spend less energy defending our opinion, we are more likely open to new information. We can pivot more quickly, and change course in more rational and less reactive ways.

If we stop trying to predict and focus on having a disciplined investment strategy, one that we can ride out a difficult market with given our goals, we can pull ourselves out of the reaction, fear and greed cycle. We can make better decisions and focus on what really matters.

Victor Adint, CFP®, Berkeley MBA

The opinions in this newsletter are those of the author and not necessarily those of Raymond James. Raymond James does not offer tax or legal services. You should discuss any tax or legal matters with the appropriate professional.

Certified Financial Planner Board of Standards Inc. owns the certification marks CFP^®, Certified Financial Planner^™,   and   in the U.S., which it awards to individuals who successfully complete CFP Board’s initial and ongoing certification requirements.