Did you make any money on your stock-market investments this year? I did. But it’s not because I am ultra-smart. Nor is it because I am especially good at timing the market.
In fact, the best thing that any of us could have done this year – or any year, if truth be known – is to ignore the noise.
Did you know that the Dow Jones Industrial Average has risen nearly 20% this year? And a broader measure of the US market – the S&P 500 – has improved 25%. Meanwhile, the tech-heavy NASDAQ is up 29%….
….so, the US market has risen in spite of Donald Trump. Or because it is because of the unpredictable antics of the US president.
In the UK, the FTSE 100 is up 7%. That is in spite of nervousness over the outcome for Brexit. Or perhaps it is the nervousness over Brexit that has caused the stock market to rise.
In Australia, the ASX has gained nearly 20%, in spite of an economic slowdown in the country’s largest trading partner, China. In the meantime, the Shanghai Composite has jumped 17%. Even Hong Kong’s Hang Seng Index has managed to put on 2%, as the city grapples with the worst civil unrest in living memory.
In Singapore, the Straits Times Index is up 3%, as the city state copes with economic slowdown. If another 3% is tacked on for dividends received, then the total return for the year doesn’t look too bad, at all.
Thing is, stock markets have done well in spite of the worrying events that have been unfolding around the world this year. If we had listened to the naysayers, we would could be forgiven for thinking that we are all off to hell in a handcart.
Peter Lynch once said that we should develop a disciplined approach to investing that enables us to block out our own distress signals….
…. Not many people would have thought that 2019 could have been a year to make money from shares. But it has. And the key to making money in the stock market is not to get scared out of them, ever.
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None of the information in this article can be constituted as financial, investment, or other professional advice. It is only intended to provide education. Speak with a professional before making important decisions about your money, your professional life, or even your personal life. Disclosure: David Kuo does not own shares in an of the companies mentioned.
