In the last couple of weeks I have read a number of news reports indicating that troubled waters are ahead for investors. Some reports have suggested that the Australian housing market is in a bubble and it is only a matter of time before it bursts. Other reports have listed a number of reasons why the Australian sharemarket is set for a dramatic correction. Add to that the doomsayers forecasting what will happen if the Australian dollar continues to fall and you could be excused for thinking that the sky is falling in, like the children’s story of Chicken Licken.
Well I can’t predict the future and I’d encourage you to be wary of anyone who says they can. I also know that forecasters and would be economists garner a lot of attention from negative views. News channels know that people tend to pay more attention to negative news than positive news and so they focus on the negative in order to increase sales and readership.
A few years ago in my role as the Chair of the Mackay Chamber of Commerce I was presenting to a Rotary club on the topic of the local economy. After sharing my views I asked the audience for questions and comments. One of the members who was a well-established local businessman said that he had been around long enough to know that there would always be good time and there would always be bad times. He said knew not to get excited in good times and not to get concerned during bad times. He knew that he just needed to focus on his business and let external factors look after themselves.
During good times and during bad times you need to recognize the importance of diversification and a well planned strategy. No investment will always perform well, no investment will always perform better than others so develop a blend of investments that have been designed to suit your individual needs and concerns. Enjoy the good times as they won’t last forever and don’t panic when times get tough - stick to your long-term strategy and focus on what you can control.
PS - In the children’s story Chicken Licken and friends were eaten by Fox Lox and never got to meet the king because they focused on what they thought was bad news. I will leave you to draw parallels between the story and your own financial position.
