Mind Games: An Investment Lesson From 2021

Each year, the stock market offers us valuable lessons that we can apply to become better investors. 2021 was no exception.

In 2021, the stock market had a remarkable run, with the S&P 500 Index surging by more than 25%. However, even during this strong performance, there were concerns that might have tempted investors to make hasty decisions.

Inflationary pressures and supply chain disruptions were major themes throughout the year. There were worries about how these factors might affect the markets and the overall economy. Additionally, the emergence of the Omicron variant led to a significant spike in cases, raising further concerns.

Despite these challenges, the market thrived. This reinforces the idea that markets often climb a “wall of worry.” It’s important to remember that having concerns or unanswered questions doesn’t necessarily mean the market will decline. Predicting market movements with certainty is impossible.

The lessons from 2021 remind us that markets can perform well in the face of uncertainty and concerns. When making investment decisions, it’s crucial not to be swayed solely by how concerned we feel, as emotions can be fickle. Instead, our decisions should be grounded in our financial plan, our unique situation, and guidance from our financial advisor. These factors should guide our choices, irrespective of the worries that may dominate headlines at any given moment.

If you’re considering working with us here at Mosaic, we invite you to learn more about who we serve and how we help them. You can also contact us with any questions you have.

By Anthony C. Williams, CWS, ChFC, MRFC, CLU | Investment Advisor Representative | President & Founding Partner of Mosaic Financial Associates & Orthopaedist Advisory Group | Securities and advisory services offered through Cetera Advisors LLC, Member FINRA/SIPC, a broker/dealer and a Registered Investment Advisor.  Cetera is under separate ownership from any other named entity.

©The Behavioral Finance Network. Used with permission.

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