As children, we love the ever optimistic Winnie the Pooh, in his undersized shirt with no pants, even if he’s not the brightest. And while we feel bad for Eeyore, he is certainly not our favorite. But in adulthood, something shifts–we start gravitating toward negativity and exalting it as intelligence.

In the world of investing, negativity often comes from “permabears,” which is a euphemism given to analysts, commentators, and forecasters who always (permanently) have a bleak (bearish) market outlook. Here’s how to spot them:

They always think the market is about to drop,
Incite fear with technical and scary statistics, and,
Most importantly, paint anyone who disagrees with them as naïve.

Unfortunately, they typically are quite intelligent, have the loudest voice in the room, and sometimes do get it right. And even when they’re wrong, they still claim intellectual high ground by explaining why they “should” have been right.

But here’s the only thing that matters. Pull up a chart of the Dow and zoom out as far as you can–it goes up and to the right, making money for anyone along for the ride. Obviously, I’m not endorsing blind optimism–if you zoom in there are some scary cliffs in 1929, 1987, 2008, and 2020.

However, you shouldn’t let the fear of market dips drive investment timing decisions. If you did, you would have missed double digit returns in 2023, a year in which there was plenty of reason to be fearful: inflation, high interest rates, war in Ukraine, bank failures, renewed conflict in the Middle East, potential government shutdown, escalation of tension with China, etc..

Instead, if you have a short investment horizon (e.g. older investor) or lower risk tolerance (e.g. market volatility keeps you up at night), then lower your equity exposure on the front end, not in response to negative market forecasts.

Allocation is key, and trying to time the stock market is a fool’s errand. Don’t try to outsmart the market, just hop on and settle in for the long haul.

Josh Norris is an Investment Advisory Representative of LeFleur Financial. Josh can be reached at josh@lefleurfinancial.com.

Josh Norris, CPA, CFP, CFA is the managing member of LeFleur Financial, a wealth management and tax advisory firm.