Investing in Your 20s & 30s For Dummies, 3rd Edition

Developing and Testing Your Investing Beliefs

What are your investing beliefs? Most investors haven’t taken the time to consider that question, let alone answer it. During the sharp stock market slide in 2008, some investors started following particular gurus who claimed to have predicted the financial crisis. And then the 2020 COVID-19 pandemic and government-mandated shutdowns really set investors on edge due to the surprising nature of that episode. These investors wanted to believe that someone out there could predict important financial events and tell folks how to time their investments to benefit from what was about to unfold.

Such market timing is a fool’s errand. It sounds possible — and we’d like to believe that it is — but it’s not possible on the scale various charlatans would have you believe. Furthermore, many of those who boast the loudest about their market-timing ability are worse than average at it.

It’s challenging to work with someone on his investments when he has little in the way of background and beliefs. As someone seeking to educate yourself about investing, you may have a better idea of your investment beliefs than other investors do. To help you along in this process, here are some beliefs for you to consider:

• Your own personal comfort matters. A wide range of investments are available to you, including stocks, exchange-traded funds (ETFs), mutual funds, real estate, and small business. Some folks are simply more comfortable with particular investments, ...