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I often write on Quora.com, where I am the most viewed writer on financial matters, with over 357.1 million views in recent years.

In the answers below I focused on the following topics and issues:

If you want me to answer any questions on Quora or YouTube, or you are looking to invest, don’t hesitate to contact me, email (advice@adamfayed.com) or use the WhatsApp function below.

Some of the links and videos referred to might only be available on the original answers. 

Source for all answers – Adam Fayed’s Quora page.

What should one do in the event of a financial crash?

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The quote above sums it up. Usually to do nothing works out more profitable than doing something.

There is a simple reason for that – markets have always came back and when people do something, they usually do the wrong thing.

Here is how long it has taken markets to recover in the past:

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Therefore, holding on makes more sense. It took only 2–3 years for markets to recover from 2008, and about 6 months from 2020.

It is true that taking some action can be profitable, for example:

The problem is, most people who take action don’t do this. They are more likely to either panic sell or hold off on new injections.

Panic selling is very unprofitable as 2020 showed:

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What is opportunity cost and joint cost?

The below equation is a simple explanation:

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Some examples are

In many ways, it is common sense. Every decision has direct and indirect costs and benefits, so even if you are directly “winning” from one decision, it could still indirectly cost you.

Indirect, and slow, losses, seldom bother people as much as direct hits though.

Are bonds a bad investment?

Historically, bonds haven’t been a bad investment. They have beaten cash, bonds, and gold:

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What is more, bonds aren’t as expensive to insure as some physical investments.

The issue is that things changed after 2008. Bonds have paid little for over a decade now.

So, the above 3.5% after inflation average is now about 2.5%. The major benefit of bonds is now diversification.

Bonds can go up when stocks go down, or at least now fall as much. The best example of this is short-term bonds.

They are less volatile than long-term bonds and much less than stocks. They went up in 2008 and US Treasury (short-term) did OK in the 2020 crash.

This means that a bondholder can sell some of the bonds, and rebalance towards stocks that are falling.

In addition to that, we have to remember a basic issue that investors have – recency bias.

Japanese stocks have beaten US ones since 1945 as per the video below. They have also outperformed many stock markets since 2008

Few people know that because the performance since the peak bubble has been bad.

Likewise, in the early 1980s, many publications were speaking about “the end of stocks?”

Why? Well, the US stock market was stagnant for 17 years, even adjusted for dividend reinvestment.

We saw the same thing in 2010, after a lost decade for the US stock markets. People weren’t keen on investing in stocks.

Yet from 1982–2000 and 2010-present, stocks have done very well – better than 99% of people thought in the beginning of those periods.

The point is just because bonds aren’t performing well now, doesn’t mean that will always be the case.

Bonds might not beat stocks ultra long-term. They never have done, even in the heyday.

That doesn’t mean they are dead though.

Pained by financial indecision? Want to invest with Adam?

Financial Planner - Adam Fayed

Adam is an internationally recognised author on financial matters, with over 735.2 million answer views on Quora.com, a widely sold book on Amazon, and a contributor on Forbes.

Further Reading

In the answers below, taken from my online Quora answers, I spoke about the following topics and issues:

To read more, click on the link below

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