Markets are up, so what investment options do we have?
Am I the Only One Nervous? (Pension Partners)
No, you are not.
So it seems this is the longest period of time without intraday moves of 1% since….1970. Pretty strange in a stock market like S&P500. It seems that this is a time to cite a famous quote from Warren Buffett:
“Be Fearful When Others Are Greedy and Greedy When Others Are Fearful”
The way I think about investing, is to try and invest in an opportunity where some asset is undervalued. As stock markets are so high, what should I do?
In financial markets (and outside financial markets), in my opinion, there is always a good investment, regardless of the moment. We have always investment options.
So let’s go through some of them:
- Not doing anything: This is probably the equivalent of having your cash in “cash-type” investments, like bank deposits, or short-term high-quality bonds;
- Buy “insurance”: Invest in an asset that, can hold its value or even increase, in case of a down stock market;
- Passive Investment: Have an automatic plan where you are invested in different types of assets, and rebalance them one or two times a year;
- Option Contract: Invest in put options of a security that may go down;
- Real economy: Invest in something else besides financial markets, like for example Real Estate, or a small business;
- P2P investment: in a short-term loan with a buyback guarantee (I will write about this in the future).
So as you see there are a lot of options. Some are better than other. If I had to choose one, I would say it depends on a lot of factors, like for example, if you had a huge opportunity in real estate, or some asset not correlated with the stock market is really down. It also depends on the money that you have to invest in that moment.
Remember one thing, being always afraid of a bear market, or afraid that when in a bear market it will go even worse, doesn’t help. So have a plan. Have a strategy. Or else you will end up in a state of Analysis Paralysis. Maybe the next article will help you in some way:
- The Bear Market That Nobody Talks About (The Irrelevant Investor).
If you agree/disagree, or wish to add something to this thoughts, please comment. If you like it, share it!
See you soon!