Know The Difference Minute

Unlike paying taxes where there is a deadline, the economy does not obey the clock.

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Inevitable versus imminent
Welcome to the Know the Difference Minute for Thursday, August 24th.
Benjamin Franklin said “nothing can be said to be certain, except death and taxes.”
With investing, we deal a lot more with probabilities than certainties. The same thing applies to economics. Based on the historical record, economic downturns, or recessions, look inevitable. Unlike paying taxes where there is a deadline, the economy does not obey the clock. Something can be inevitable without being imminent, or likely to happen immediately.
Similarly for market corrections or downturns. They happen. They don’t obey a clock. There could be a pullback but is it from today’s price or from some future price that may be much higher? Trying to time those things can be a fool’s errand. That’s why a gambling maxim is helpful: if you can’t afford to lose your shirt, don’t bet your shirt. Stay diversified and patient for long term success.
I’m Brian Jacobsen, Chief Economist at Annex Wealth Management. That is your Know the Difference Minute.