Why Lawson Kroeker Favors Long-Term Investment Advice Over Speculation: And, Does Speculating Over Investment Advice Even Work?
As winter approaches the Midwest, some experts say the bear market is stirring from hibernation, ready to come out of its den. As the bull market continues an extensive run since March 2009, many investors wonder what investment advice should guide their decisions.
In truth, if you’ve ever worked with our team at Lawson Kroeker, you know that the headlines don’t have much impact on the steady focus of our Chartered Financial Analysts®. Read on as we share further insights on the topic.
“Is it different this time?” is a common question when talking of the current market conditions and working with those seeking investment advice. There are always variations in how the stock market plays out, and this time is no different. As discussed in one of our “As We See It” quarterly reflection pieces, the factor that differentiates this long bull market run is the speculative (or fast) money flowing in and out of the market.
Is the bull market aging? Peaks in speculation and momentum are telltale signals of an aging bull market. Investors, in a rush of fear of missing out (FOMO), often make purchases at a time when the prices should influence the opposite behavior. This often occurs with initial public offerings (IPOs), which entice investors with the hopes of investing in the next great thing. Unfortunately, many of these IPOs fail their investors, who watch their speculative money slip away quickly after it peaks.
What are areas of new speculation? One of the newest speculative types of investments has been in cryptocurrencies. Many investors jumped to acquire the Bitcoin, but there’s been no emergence of a single platform to support it or provide widespread acceptance of this currency. Those who purchased Bitcoins watched as their value increased from around $900 in early 2017 to around $19,000 in December of that year.
Given the anticipation that the value would significantly increase from there, investors continued to hold tight to Bitcoins as the value then dropped to around $4,400 in the fall of 2018.
Speculative investing and trends come and go, but the investment philosophy at Lawson Kroeker remains consistent, focused and diligent. As we’ve done since our founding year, our team embraces a long-term view of investing that helps build success over time. Contact us today to learn more.