Don’t Be Frightened out of the Stock Market

Here’s the most basic thing you need to know about the world today. None of it is really that bad. The reactions you see in currency and stock markets aren’t a result of an election or referendum. It’s a result of humans making decisions on outcomes they simply cannot be certain of.

When humans make decisions on uncertain outcomes, what do you think you get as a result…?

Uncertainty, of course.

Here’s a thought. What if, as a result of the British referendum last month, everyone had decided it was an amazing outcome? That the UK will become stronger and more robust — a powerhouse of the global economy once again.

Or that, when the Aussie election finally ended, the country could move forward and thrive? That a result — any result — might be a good thing. Now we can get on with it. Foster innovation, transition to a knowledge economy — become a global economic force once again.

What impact do you think that would have on markets? If everyone thought the days ahead were better, would it drive markets higher?

Think about the stock market. Small-cap stocks in particular. What impact might a change of mindset have?

After all, what evidence is there that things will be bad long term? In fact, what proof is there of how anything will be in the future? There is none, of course.

There is no such thing as a 100% accurate future predictor. If there was, I’d probably be on a beach in the Mediterranean, wondering which of my mega yachts I was going to use today.

But as educated investment professionals, our job is to try and predict what’s coming in the future. To give you advice and guidance on where to invest, and in which companies. Of course, we never profess to get it right 100% of the time. No one should. If they do, don’t trust them.

We also aim to be a guiding voice. In the investment game, it’s not just about which stocks you put your money in. It’s also about having the right temperament, knowing when to get in, when to get out, and when to keep a calm head.

Now is the time to keep calm. And now is the time to pick the right opportunities for your investment strategy.

It’s easy to get caught up in the negativity when you’re bombarded with it 24/7. If you don’t see it on news broadcasts during the day, you see it on social media. Or you hear about it while chatting with friends and family. Or you just make stuff up in your own head to kill time.

The world today is one giant mainstream media report. It’s everywhere. On the TV, your phone, billboards, radio, bus stops, trams, trains…everywhere. And the problem is there’s no media station in the world that only tells you about how good things are, or how good they can be.

Bad news sells papers. Bad news keeps you fearful. It keeps you obeying the rules. It keeps you in check for the powers that be to control you. In our modern world, fear reigns supreme — and it leads to some silly and irrational behaviours.

This fear and uncertainty causes your ‘average’ investor to sell stocks in a market that actually isn’t that bad. It also creates opportunities for investors who can filter the noise, and make shrewd and smart investment decisions.

We’re not saying the overall market is going to leap ahead and set new record highs in the next year. In fact, we’re on record saying we don’t think the All Ordinaries will change much over the next five years. They will truly be ordinary.

We also think that, while the picture in Australia isn’t amazing right now, it’s not as bad as it could be. The future can be prosperous. While the government can help boost that prosperity, it probably won’t. But private industry will. Australia could be at the forefront of a major boom in new innovations and technologies — keep following Money Morning and I’ll cover more in the coming weeks.

And overseas? Well, the UK leaving the EU will prove to be a godsend. The UK will be better off in the long run, for sure. In fact, if the whole EU broke up, we think the entire region would be better off. Hopefully that’s the direction the EU is heading in.

These outcomes are all positive. They will lead to better markets. But right now, while people buy into the mainstream belief that things are bad, it becomes a self-fulfilling prophecy.

But things aren’t that bad.

There are still amazing companies on the ASX — most of them small-caps. If you take the right mindset, you’ll see the opportunities that are right in front of you. You’ll then find that, even with fear and uncertainty, the stock market can be a highly rewarding place for investment.


Sam Volkering,
Editor, Money Morning

Sam Volkering is an Editor for Money Morning and is small-cap, cryptocurrency and technology expert.

He’s not interested in boring blue chip stocks. He’s after explosive investments; companies whose shares trade for cents on the dollar, cryptocurrencies that can deliver life-changing returns. He looks for the ‘edge of the bell curve’ opportunities that are often shunned by those in the financial services industry.

If you’d like to learn about the specific investments Sam is recommending in either small-cap stocks or cryptocurrencies, take a 30-day trial of his small-cap investment advisory Australian Small-Cap Investigator here, or a 30-day trial of his industry leading cryptocurrency service, Sam Volkering’s Secret Crypto Network here.

But that’s not where Sam’s talents end. Sam specialises in finding new, cutting edge tech and translating that research into how the future will look — and where the opportunities lie. It’s his job to trawl the world to find, analyse, research and recommend investments in the world’s most revolutionary companies.

He recommends the best ones he finds in his premium investment service, Revolutionary Tech Investor. Sam goes to the lengths of the globe and works 24/7 to get these opportunities to you before the mainstream catches on. Click here to take a 30-day no-obligation trial of Revolutionary Tech Investor today.

Websites and financial e-letters Sam writes for:

Money Morning Australia