Excess Returns, Ep. 28: The Danger of Focusing on What Should Be and Missing What Is

We all have our beliefs about the way that things should work in investing. When the market gets overvalued, we think it should go down. When value stocks struggle for a long period of time, we think they should outperform. When central banks or governments implement policies we don’t agree with, we think they will inevitably end in disaster. But that focus on the way we think things should be can sometimes lead us to miss the reality of what is.

In this episode, we talk about:

The reasons the market continues to rally despite one of the worst economic situations we will likely see in our lifetimes;
The dangers of allowing your beliefs regarding Federal Reserve policy to filter into your investment strategy;
Why momentum can be the great equalizer in separating what is from what should be.