It’s been nearly a decade since I started speaking to fund managers on a regular basis. While each conversation is about something different—a sector to invest in, a stock to explore, an economic issue to pay attention to—one comment has come up time and time again: “Markets hate uncertainty.”
It’s an idea that has, in general, caused some investors to hold cash in favour of stocks with the hopes that they’ll be able to buy back in once the market falls. It’s also a line that finance professionals like to use to help make sense of what might come next. If stocks perform well in a seemingly out-of-control world, then what reason would they have to fall? Eventually, they say, the bad news will catch up.