The easy money has been made. What’s in your portfolio?

Those who think the stock market is easy might want to rethink that stance. There is an old expression that goes, “Everything is simple. it just isn’t easy”. Want to lose weight, eat less. Want to save money, spend less. Very simple ideas in principle but always prove extremely dificult in execution.

Investing was never meant to be easy. If it was, we would all be rich (in the monetary sense). It takes a lifetime of study, practice, failure and experience to get it right, more often than not.

In the 10-12 years leading up to 2022, it seems everyone assumed stock markets just go up. Why wouldn’t you? Interest rates were either heading down or at rock bottom. Central bankers were pumping the money supply, and inflation was nonexistent. Everything was the markets friend.

Well, I don’t want to put a damper on the happiness, but all of my inclinations (from over 30 years of study, practice, failure and experience) are telling me the “street” could become much darker and less friendly in the near future.

The times of taking your money, giving it to an algorithm and having that program buy you a basket of index funds, or just index funds for that matter, may become a very dangerous investment strategy. You may just have to do some work if you want to succeed on the mean “streets” of the investment world.

We always say that it is important to “know what you own” and now that is more relevant than ever. This isn’t new. Well-respected Peter Lynch, former Fidelity Magellan Fund manager, said in his 1988 book:

“Know what you own, and know why you own it.”

Peter Lynch, One up on Wall Street: How to Use What You Already Know to Make Money in the Market

In the current petri dish of economic ingredients, I don’t think any one can predict what rising interest rates, shrinking money supply and inflation are going to do to markets (equity, real estate or other). You are really going to want to own things that are profitable, not just some random basket of popular names.

In our next blog, we are going to talk about inflation as well as how it can really add up and start to erode your retirement funds. Consider what could happen if you do not know what you own, how it will protect you from inflation and or stock market volatility and how you are going to manage challenges.

Spend some time (say the equivalent of one Netflix series binge!) and do some homework. Learn about what you own and then maybe you can determine why you own it.

Information in this article is from sources believed to be reliable, however, we cannot represent that it is accurate or complete. It is provided as a general source of information and should not be considered personal investment advice or solicitation to buy or sell securities. The views are those of the author, Les Consenheim, and not necessarily those of Raymond James Ltd. Investors considering any investment should consult with their Investment Advisor to ensure that it is suitable for the investor’s circumstances and risk tolerance before making any investment decision. Raymond James Ltd. is a Member Canadian Investor Protection Fund.