The Daily Forex Market Report
April 7, 2025
WHAT IS MOST IMPORTANT TO PEOPLE?
April 9, 2025
2025
What is beyond our control?
Let’s be real: The world feels chaotic right now. Institutions are wobbling, markets are volatile, and the world is overflowing with uncertainty. These are external factors and are largely beyond our control. In an era that has been marked by self-reliance, we struggle to cope when we feel we are unable to influence and alter. This adds to general anxiety, which you may be experiencing as an investor.
What can we control?
The winners in investment are those who are more accepting of uncertainty. With acceptance they lower anticipatory anxiety and instead focus on what they can control. They realize that they control the choice of how to react to external stimuli. We cannot control the external environment, but we can control the internal environment and how we react to the external environment.
We are emotional and often irrational beings and anxiety fuels both emotions. Regretfully emotion and in-vestment strategy are like petrol and matches. When anxiety and fear drive our investor behaviour, we disinvest in volatile periods like we are currently experiencing and by doing so, lock in losses. This severely harms our financial outcomes.
Although there is no guarantee, historically, each downturn has been followed by an eventual upswing explaining why the market, over time, always goes up.
Over a 96-year period (ending 31st December 2023) the S&P 500 has had positive results for 73% of those 96 years. That is a decent outcome when you consider we are dealing with an external, uncontrollable factor. More importantly though, is the statistic that in the same timeframe, 10-year periods have been positive 94% of the time. That 23% positive return probability is within our control.
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