The Danger of Focusing on What Should Be and Missing What Is

We all have our beliefs about the way that things should work in investing. When the market gets overvalued, we think it should go down. When value stocks struggle for a long period of time, we think they should outperform. When central banks or governments implement policies we don't agree with, we think they will inevitably end in disaster. But that focus on the way we think things should be can sometimes lead us to miss the reality of what is. In this episode, we talk about the balance between having conviction in the way things should work out and recognizing the way they are actually working out.   We discuss:  - The reasons the market continues to rally despite one of the worst economic situations we will likely see in our lifetimes - The dangers of allowing your beliefs regarding Federal Reserve policy to filter into your investment strategy.  - Why momentum can be the great equalizer in separating what is from what should be  ABOUT THE PODCAST Excess Returns is an investing podcast hosted by Jack Forehand (@practicalquant) and Justin Carbonneau (@jjcarbonneau), partners at Validea. Justin and Jack discuss a wide range of investing topics including factor investing, value investing, momentum investing, multi-factor investing, trend following, market valuation and more with the goal of helping those who watch and listen become better long term investors. SEE LATEST EPISODES www.validea.com/excess-returns-podcast FIND OUT MORE ABOUT VALIDEA www.validea.com FOLLOW OUR BLOG blog.validea.com FIND OUT MORE ABOUT VALIDEA CAPITAL www.valideacapital.com FOLLOW JACK Twitter: twitter.com/practicalquant LinkedIn: www.linkedin.com/in/jack-forehand-8015094 FOLLOW JUSTIN Twitter: twitter.com/jjcarbonneau LinkedIn: www.linkedin.com/in/jcarbonneau