Why Investing Is the Opposite of Playing at the Casino

Markets have quietly been having a reasonable year so far in 2023 after a negative year in 2022

Right now, there are a lot of companies reporting quarterly earnings, and it has started well with 91% of companies beating expectations. There will probably be bigger news next week when the Megacaps such as Microsoft and Google report.

We certainly haven’t seen a dramatic collapse in 2023 that many were expecting at the start of the year but we still see a series of cross currents crashing into each other, with inflation persisting, but strong earnings recently, and some positive economic indicators being reported. It leads to uncertainty in the market when we look at it on a short term basis.

However, there is always something to be uncertain about. Even if the economy is firing on all cylinders, we probably become uncertain about stock prices being expensive.

If we zoom out, we get the perspective we need. The performance shown below is for a 60% Growth/40% Defensive Portfolio, and the lesson is don’t let the red years shake you out of all the years. Casinos make reliably strong profits based on a mathematical advantage, but their advantage is nothing compared to your significant mathematical advantage as an investor, as long as you can master greed, fear, and boredom with your investments.