Dividend Café: Something to Be Certain About
These are difficult times. That’s something that can often be heard when the stock market isn’t trading near its all-time highs. But the fact of the matter is, there’s always something for the market to be worried about.
What’s more important is that history and logic can tell us certain truths about the market going forward.
Those who continue to support the view that markets should be avoided are likely going to be disappointed. That’s because history shows that, no matter what current market fear is under way, markets tend to move up over time.
In a market selloff, buyers can get better returns. They pay less for earnings during a time of uncertainty. On the flip side, investors who are certain tend to end up overpaying as uncertainty later sets in.
Investors who sit on the sidelines, however, will end up paying up over time. Because by the time they wait for a pullback, they may miss out on years of returns.
So while markets are certainly looking volatile right now, those who are bearish are likely being set up for worse returns than those who have the patience to sit through today’s markets.
Yes, things like valuation matter. But investors don’t have the luxury of investing in a world without uncertainty.