I hope this doesn't come off as arrogant in any way. I certainly don't know everything. Not even close. I've shared many of my errors of the past. What I do know is I've had my face ripped off in corrections and bear markets. It was REALLY bad the first time. I've learned not to panic. When it rains lemons maybe you do nothing. I usually try to make some lemonade. It makes it a little less painful down the road. So here are a few random thoughts you can take or leave. Maybe they are helpful now. Maybe they are helpful in the future. I welcome other's comments if you've been through this before. Much of this is common investing wisdom, but it's easy to forget when the market gets rough.
1. It's natural to hate watching your port go down. My port is down a little over 4% from the high. That's a lot of money, but I won;t allow it to affect my investing thesis. Don't let fear control your actions. I've said it many times but don't do today what you wish you had done yesterday. That always applies no matter the market direction. It's almost always costly.
2. I think this is correction and not the beginning of a long lasting bear market. I could be wrong. I have no idea where the bottom is. I don't know the perfect point to buy more shares. If I could pick tops or bottoms I would have sold all my stock last week. Beware of taking advice from folks who pretend to know today, but are somehow sitting on a big port full of equities. They don't know anymore than they knew last week.
3. Have a plan and try to stick to it. Easier said than done for sure. Maybe your plan is to do absolutely nothing. There are times when that is the best plan. You'll probably know in a few months. It's a completely rational strategy, especially if you are young.
-Have some dry powder to buy some shares while they are down? Great! Be methodical and proceed slowly. That is exactly what I will do. I bought some shares yesterday and took today off. I have no problem buying the same stock more than once a day in small bites.
-Don't buy more junk shares just because those have fallen the hardest. Don't go too crazy chasing stocks with big headwinds if you are hoping for any near or midterm gratification. If they were stinking it up last week, why would people want to buy them now when quality is on sale in most every sector? Great stocks will rebound fast. Junk will still be junk. And speculative stocks thrive when the bull is running. Not so much now. They will be there later. They will amaze you how far they can fall when the market is scared.
-Thinking about selling some shares? What will you do with the proceeds that makes long-term sense? I may trade in some junk for quality. Maybe not. I'll go slow if I do. It's probably too late to just go to cash and jump back in later. Nobody knows.
You really do need a plan or you'll likely make emotional moves. Greed and fear, like always.
My plan may not appeal to you at all. It's worked well enough in the past. It's why I always have dry powder. I hate completely missing out on deals. So how do you handle a sudden correction?
Now I have to go tell my wife "Dammit honey, I lost another Beamer in the stock market". I didn't yet, but I have before and that's what I always tell her. Thankfully she only wants to see the port a couple times a year because she trusts me. Not tonight though lol.
Hang in there everybody!
1. It's natural to hate watching your port go down. My port is down a little over 4% from the high. That's a lot of money, but I won;t allow it to affect my investing thesis. Don't let fear control your actions. I've said it many times but don't do today what you wish you had done yesterday. That always applies no matter the market direction. It's almost always costly.
2. I think this is correction and not the beginning of a long lasting bear market. I could be wrong. I have no idea where the bottom is. I don't know the perfect point to buy more shares. If I could pick tops or bottoms I would have sold all my stock last week. Beware of taking advice from folks who pretend to know today, but are somehow sitting on a big port full of equities. They don't know anymore than they knew last week.
3. Have a plan and try to stick to it. Easier said than done for sure. Maybe your plan is to do absolutely nothing. There are times when that is the best plan. You'll probably know in a few months. It's a completely rational strategy, especially if you are young.
-Have some dry powder to buy some shares while they are down? Great! Be methodical and proceed slowly. That is exactly what I will do. I bought some shares yesterday and took today off. I have no problem buying the same stock more than once a day in small bites.
-Don't buy more junk shares just because those have fallen the hardest. Don't go too crazy chasing stocks with big headwinds if you are hoping for any near or midterm gratification. If they were stinking it up last week, why would people want to buy them now when quality is on sale in most every sector? Great stocks will rebound fast. Junk will still be junk. And speculative stocks thrive when the bull is running. Not so much now. They will be there later. They will amaze you how far they can fall when the market is scared.
-Thinking about selling some shares? What will you do with the proceeds that makes long-term sense? I may trade in some junk for quality. Maybe not. I'll go slow if I do. It's probably too late to just go to cash and jump back in later. Nobody knows.
You really do need a plan or you'll likely make emotional moves. Greed and fear, like always.
My plan may not appeal to you at all. It's worked well enough in the past. It's why I always have dry powder. I hate completely missing out on deals. So how do you handle a sudden correction?
Now I have to go tell my wife "Dammit honey, I lost another Beamer in the stock market". I didn't yet, but I have before and that's what I always tell her. Thankfully she only wants to see the port a couple times a year because she trusts me. Not tonight though lol.
Hang in there everybody!