Welcome to the week ahead. It’s looking like US news could dominate the headlines next week, as a Trump-brokered peace deal in Gaza seemingly comes closer and the US Federal shutdown rolls into its third week.
Company news may also be led by transatlantic firms, as it’s US bank earnings week. Many of the world’s largest banks are due to update the market on recent trading. At least some of their high-profile leaders will no doubt also share their latest view on the state of the world.
The long-serving head of the largest bank of them all, JPMorgan Chase & Co (NYQ:JPM), has already been making waves. On a visit to the UK this week, Jamie Dimon told the BBC he was “far more worried than others” about the risk of a serious stock market crash. However, he admitted the timing of such an event remained uncertain, suggesting a likely range of six months to two years.
This is always the problem with stock market crashes. We can often see them coming. But when even the head of JPMorgan needs an 18-month window to forecast a crash, us mere mortals are unlikely to do much better.
That’s one reason why I’m a big believer in the adage that it’s time in the market that counts, not timing the market. My personal policy is generally to remain largely invested in the market at all times, just keeping a little cash on the side in case bargain buying opportunities arise.
I believe this approach is likely to give me better returns than market timing over the course of my investing life. But perhaps more importantly, I suspect that if I tried to stay in cash so I could take full advantage of major crashes, I’d probably never invest any money at all. Only by being involved and staying invested do I have a feel for conditions, familiarity with companies and the confidence needed to buy when sentiment is poor.
Discussing AI - perhaps the most likely cause of the next crash - Dimon said “AI in total will pay off”, but warned that as with other historic innovations like the car, many individual investors and companies are likely to lose money along the way.
I think that’s a pragmatic and realistic way to look at things. It…
