Whenever I hear investors say that making money in the markets are easy, I start doubting them if they really were able to make money at all because it is never easy. In fact, I would argue that it’s always hard.

Convincing yourself to buy during a bear market is hard. Convincing yourself to hold during a bull market is hard. Figuring out what to do during a sideways market is hard. Watching others make more money in the markets than you is hard. Following a plan when things aren’t going your way is hard. There’s always going to be a reason to do something that goes against your best interests.

Where we are in each cycle usually determines what the hard part is at that moment. The hardest part for the past few years has been holding on during a rising market. Investors witnessed two epic market crashes in the span of eight years to kick off the start of the century. Those types of losses leave scars on an investor’s psyche.

So as stocks have continued to rise people have become more and more nervous about another crash. There’s been a relentless onslaught of people calling for a recession or market crash at every turn. It’s hard for investors to know who to trust and what to do in these situations where markets continue to rise year after year.

Holding during a bull market is difficult because you’re always worried about when the music is going to stop. And holding during a bear market is always difficult because you never know how bad things can get.

So the question becomes: How do you ensure you’re able to hold during a bull market but survive during the inevitable bear market?

Trying to make investment decisions in real time during a rising or falling market without a set of guidelines in place is just asking for trouble. Emotion is the enemy of every portfolio and it rarely allows an investor to make rational decisions in the moment.

Most investors out there thinks that they should always outsmart the markets but they are really just outsmarting themselves. It doesn’t work. George Soros’s phantom back pains aren’t going to magically appear for you before the next bear market hits. You have to have a plan in place before something bad occurs to understand what you’ll do regardless of what happens next.

The obvious answer for most investors is to set a reasonable asset allocation, rebalance on occasion, and mostly do nothing the rest of the time. Holding can still become an issue with this strategy if you don’t set the correct allocation ahead of time or if you don’t have the ability to see it through. Buy and hold is so simple yet very hard to pull off because of this.

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