I read two separate things last week.
Ben Carlson received this reader letter in his post Investing in an Uncertain World published on 17 April 2025:
What are we supposed to do over the next 4 years with the Administration’s continuous change in policies? I went heavy into cash before Trump took office. I trusted that he was going to keep his word, and break things. I just didn’t expect him to break the market. But now I’m stuck, fearful of this constant uncertainty that seems to never go away. It’s already been a long 3 months. I was planning to retire this year, but unlikely now. My Money Market is getting that decent 4% yield right now, and at least this helps me sleep at night.
Then the same reader emailed Ben back in The Sunk Costs of Market Timing on 16 May 2025:
I was one of the guys that emailed you last month bragging about how I went to cash because I was positive Trump would do something to crash the market (hey I was right for a brief moment). That turned into a true not to brag because now markets have completely recovered and I don’t know what to do. I assumed things would get a lot worse before they got better and I would have plenty of time to buy. I’m still not convinced all of the Trump volatility is gone but I feel stuck sitting in t-bills. What’s my next move?
Former hedge fund CIO and author Ted Seides wrote in The Hardest Day to Invest is Always Today:
One of my earliest manager meetings was with Jeremy Grantham in 1992. He made a compelling case that the bull market of the 1980s had run its course. Around the same time, I learned about Warren Buffett and considered buying Berkshire Hathaway stock. At $12,000 per share, BRK.A was beyond my means.
I assumed I was too late – the easy money had already been made. But in hindsight, I was standing at the starting line of one of history’s greatest bull markets.
A sensible investment commentator would recommend you to sell your investment to a point where you feel that the weight will not prevent you from sleeping.
I think people would not be able to sleep if they feel that they bloody need to get invested but need to find the “right” entry point.
Everyone has an ideal asset allocation in their mind. Can be all cash. Can also be 100% equity.
I used to have a reader who confided had he invest a few years early, it would be better. I hope he has taken advantage of any fall because during the fall, it might end up closer to the prices back in those days than today.
There is a mindset that if I get in when the price “is very right”, all my problems goes away.
The truth is that the problem, or any anxiety or uncomfortableness does not goes away.
It re-manifest in a different form of monster that makes you feel uncomfortable that is all.
- The Graham style individual stock investor buys the stocks below its intrinsic value. But at night he wonders if that intrinsic value has changed or whether he miscalculated, when the stock takes another 35% drawdown on poor earnings.
- The Quality at a reasonable price individual stock investor saw the stock take a same 35% drawdown, and wonders if the business is really that quality or he mis-analyzed it. Or that he hasn’t considered certain aspect of the business that has become more apparent after the latest earnings released.
- The investor who has rode up a bull market in Asia ex-Japan region for the past 8 years wonders how long can this continue. Or whether it is normal for a region to do so extremely well for such a long period.
- The globally diversified portfolio investor who was sitting comfortable with his allocation because he got in at “good prices” now became concern if he needs to change his portfolio because “it is a new different world now.”
- The globally diversified portfolio investor wonders if he has made a mistake by having allocations in regions which has not done well for the last three years. It seems clear to him that the regions will never be better than the best performing region now.
- The fixed income investor was sitting pretty comfortable with his fixed income fund, but recently there is so much talk about US bond yields rising, their long term viability as a lender.
- The person in cash is uneasy that a seemingly good 4% yield is going to be no more already.
I am pretty big on identifying evergreen advantages or challenges because if you are able to recognize them, then we can discuss how to leverage or solve them better.
And sometimes you might need to recognize that no matter how hard you try to avert, the cost of investing is that you will be uncomfortable about something.
So how are you going to deal with uncomfortableness?
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