Past recipes for a new market?
Hello Project HOPE friends, happy day to everyone. I hope you're all doing well. Today I want to tell you something we sometimes overlook when we see news about investments, stocks, or people who made money in the stock market: the famous phrase "past profits do not guarantee future profits."
And although it may seem obvious, we don't always take it into account. You see a chart of a stock that skyrocketed in the 1990s or hear someone say that a certain strategy worked for them decades ago, and you think that applying the same thing today can yield the same results. But that's not the case. The stock market changes, the market changes, and above all, the context changes.
In the 1980s and 1990s, for example, many people got rich by investing in large tech startups because they were just emerging at the time. Today, they're no longer startups, they're giants. So it's not just about copying what someone did in the past, but about understanding why it worked at that time and whether conditions remain similar today.
It reminds me a lot of what happens with some personal finance books that repeat formulas from the past without taking into account that there's now inflation, new technologies, even new ways of investing that didn't even exist 20 years ago. So, of course, we can learn from the past, but we can't live expecting conditions to be the same.
I've also noticed that some people become obsessed with finding the perfect strategy, and since investors were successful with something a while ago, they believe it will save them today. But there are no guarantees. That's why it's important to have a critical eye, learn from various sources, and adapt. Because what worked before can even be risky today.
In the end, investing is also about knowing how to read the present, not just repeating what others have done. And like everything in life, there are no magic recipes; you have to observe, learn, and be willing to change. What do you think? Do you think there are still strategies from the past that can work today, or do everything need to be reinvented?
There are financial advisors who keep teaching the old principles to thousands of followers who feel frustrated at the end of the day when they are not able to achieve desired result. We must understand that times are changing and we need to evolve with time.