This story was originally published here.
You have a choice…
You can invest only when you feel like the market fits your investment thesis… Or you can put money to work when the data shows the odds are stacked in your favor – regardless of how you feel at the time.
When I put it like that, it probably seems obvious. But investors run into this dilemma – and do the wrong thing – every single day.
Humans are emotional. We tend to put more emphasis on how we feel than on the data we see.
This is where many investors go wrong…
The noise around them keeps them from recognizing a great opportunity. Most investors miss life-changing gains because of it. Or worse… they suffer crippling losses because they did the wrong thing.
Today, you're probably worried about getting back into stocks. Fear is causing a lot of folks to miss the rebound rally.
One major culprit is the disconnect between stocks and economy. Investors don't see how stocks can rise when the economic picture looks so bad. But as I'll share today, what's happening is more normal than you'd probably expect…
I focus on data when it comes to investing. It's the only way to look past your emotions and make smart decisions in tough times.
So what does the data tell us today?
Right now, it's darn scary out there. More than 30 million people in the U.S. have filed for unemployment since mid-March. The coronavirus has delivered an unprecedented blow to the U.S. economy… And there's talk of a renewed trade war between the U.S. and China.
I get it if you're scared. It's scary to put money in stocks when friends or family are without jobs. But again, the market doesn't care about how we feel. Trying to fit the market's action to our feelings is a fool's errand.
You've probably been worried about rising unemployment numbers over the past several weeks… but the stock market didn't care. The S&P 500 is up 28% since bottoming in March.
But there's an important truth you need to understand. It's simple and perfectly explains what's happened in recent weeks…
The U.S. stock market operates on a different time cycle than the U.S. economy.
Stocks tend to move much faster than the economic environment. They anticipate what's coming. That means stocks are the first to fall during tough times… And they often rally before the economy even begins to recover.
In fact, stocks can rally even when the economic outlook seems to be worsening. Take March 2009, for example…
In the thick of the financial crisis, U.S. stocks bottomed on March 9, 2009. It was the end of one of the worst bear markets since the Great Depression.
We know this was a fantastic time to buy – in hindsight. But if you were an investor back then, it didn't feel that way…
The unemployment rate in the U.S. continued to decline for another eight months. By October, 10% of the U.S. workforce was out of a job for the first time since 1982.
But U.S. stocks had already taken off by then. Take a look…
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The REAL reason why the rich are getting richer
If you want to understand the REAL reason why the rich are getting richer…
While everyone else is falling behind…
All you have to do is watch the first 10 minutes of this amazing video, produced by a multi-millionaire, from his corner office.
He explains what you need to know, and the one investment you need to make (it's not a stock, bond, ETF, mutual fund, or precious metals) to make sure you don't fall behind.
I guarantee you've never seen these ideas discussed in this way before.
Watch at least the first 10 minutes of his video and you will think about what is happening in America in a very different way. And you could make a ton of money too, if you follow his recommendation.