The Bettr Blog

When shares and the economy diverge

Jun 17, 2020 | Buy and Hold, Coronavirus, Dimensional, Discipline, Investing, Stock Markets

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I don’t know about you, but don’t you find the recent stock market rebound a bit puzzling? If so, you are not alone.

The last few weeks have produced plenty of examples of poor economic indicators, but up until the past week stock markets have performed with a fair bit of exuberance.

So why the apparent disconnect?

You see, markets are forward-looking beasts. Meaning current values reflect what the market (in its aggregated view) expects to happen in the future. If things don’t turn out as bad as expected, poor economic news can be greeted with a positive stock reaction.

Looking ahead, who knows what is going to happen next.

I would, however, advise that you have a wee peek at the (very short) video below, which suggests that history is on our side here. 

Again finally, if you are at all worried or indeed fancy a virtual coffee with me, please do let me know. I’d be very happy to hear from you.

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Disclaimer: This document is intended for informational purposes and no action should be taken or refrained from being taken as a consequence of it without consulting a suitably qualified and regulated person.  It does not constitute financial advice under the terms of the Financial Services and Markets Act 2000. It is not an offer to sell, or a solicitation of an offer to buy, the instruments described in this.

Investments involve risks. The investment return and principal value of an investment may fluctuate so that an investment, when redeemed, may be worth more or less than its original value. Past performance is not a guarantee of future results. There is no guarantee strategies will be successful.