The same things I’ve been doing since the last massive market crash in 2008.
Working as a wealth manager over the years I’ve realized it doesn’t matter how many blogs, videos, social stories or posts I make in advance of bear markets the same theme pops up, my social media streams fill up with market timers, stock pickers, and people convinced this time it’s different.
Guess what, my message is still the same. I’m still here and the same behavioral finance concepts, planning ahead, staying the course, and why it’s NOT smart to try and time the markets still applies.
What’s Really Happening
Nothing has changed other than we’ve lost some VALUE. Notice I didn’t say money because if you’re properly diversified and you’ve built you’re portfolio around your unique risk preference you should be able to ride out these troubling markets and realize a recovery in value as the markets regain their footing and come back.
The Script Isn’t Always Perfect
There are years where nothing happens and then there are weeks where a years worth of things happen. What happened in March may seem like the world has changed permanently and will never be the same. In a lot of ways that might be true, but that is what your preparation for the rainy days was all about. Positioning yourself to withstand the tough markets.
What Type of Investor Are You?
Now is the time to remember what type of investor you are. Are you going to panic and have a short term outlook and drop your plan at the first sign of opposition? Are you going to ring the register and exit at the first sign of fast money and short term profits during a bounce? Or are you going to stick to your plan and be systematic with laser focus on your long-term goals?
The markets reward the patient investor. Patience can only be gained from planning ahead, looking out past the next year, and not getting thrown off course by short term profits or in this case losses.
Investor or Investment?
I’ll leave you with this, in most cases the investor matters much more than the investment. I’ve seen many people take an otherwise outstanding investment and cripple the returns due to their short term, or should I say short sighted behavioral decisions.
Day trading sounds and looks really cool but I would’ve never been able to forgive myself if I’d day traded out of Amazon, Apple, Microsoft or the S&P 500 10 years ago.