That’s over the medium term, of course. Over the short term—who knows? Just as we don’t know exactly what the next word will be, we don’t know what the market will do in the short term. But we can outline the limits of what will happen and get to the right answer by step six. For Wordle, the answer is the word of the day. For investing, though, the answer is the continued growth of your assets over time. Before taking a guess, it is worth taking some time to think through what the answer can—and can’t—be.
So, What’s The Connection?
And that is the connection. For both Wordle and investing, find the anchor points. Figure out what the answer is likely to be. And then take your next best guess when you know more. It works in Wordle and it will work with the markets, even in difficult times like now. It is really the same problem.
Brad McMillan is the chief investment officer at Commonwealth Financial Network.