At the start of a new year it can be tempting to run with new resolutions and have a determination to improve on the previous year, or at least, not to repeat the errors of the the last 12 months.
When it comes to investing and reflecting on the recent past, this new year approach can be difficult and problematic.
In our guest article David Booth, executive chairman of Dimensional Fund Advisors, provides some sound advice to investors at the start of 2023, reminding us all that although we as humans have memories, stock markets around the world do not.
David starts by saying, “One of the best things about markets is that they don’t have memories. They don’t remember what happened last week or last year. They don’t even remember what happened a minute ago. Prices change based on what’s happening right now and what people think will happen in the future.
People have memories. Markets don’t. And that’s a good thing.
So as you start 2023, take a lesson from the market. Don’t begin this new year bogged down by what happened last year. Give yourself the opportunity to start fresh.”
You can read the rest of David Booth’s article – People Have Memories. Markets Don’t. – here.
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