What a week! The range of emotions felt over the last four days must stretch from kid in a candy store to panic attack. I’m guessing, for most people, the candy store sensation is absent.
But some of us feel it. And it’s just as hard for opportunity seekers not to act rashly as it is for panicky investors. That dopamine hit after every buy order clears can be just as addicting…until you’ve burned through the cash set aside for times like these.
Patience and discipline are just as important for opportunistic investors as it is for everyone else in extraordinarily volatile markets.
As the saying goes, the best time to buy stocks is when things seem bleakest. I don’t think we’ve reached that point yet (nor do I know where it is).
But some time, like five years from now, few will remember how they felt and reacted during this crash but everyone will agree it was a wonderful buying opportunity.
My suggestion: write it down!
No matter where on the emotional spectrum you fell this week, write about it. How did you feel, what did you want to do and why you did, or did not, follow through?
If you bought or sold anything this week, write down what it was and the reason behind it. If you bought, how long do you plan on holding the position? What’s your valuation and/or selling price?
And do it again next week, and the week after that, for as long as this volatility lasts.
And if you haven’t already, write out the reasons behind why you invest — what’s the purpose behind the money, the time horizon, and the strategy.
If there ever was a time to start journaling, now is it. It will be a reminder for the next time this inevitably happens. So you can go back and read about how you got through it last time.
- I’m Here to Remind You = Reformed Broker
- The Relationship Between Recessions and Market Crashes – A Wealth of Common Sense
- Market Panics in Hindsight – Saber Capital
- A Viral Market Meltdown Part II: Clues in the Debris! – Musings on Markets
- Value Investors: Why are They so Calm in a Crisis? – Schroders
- We’ll Get Through This – M. Housel
- Assessing the Oil Shock – Klement on Investing
- Chesterton’s Fence: A Lesson in Second Order Thinking – Farnam Street
- Zero Trust Information – Stratechery
- What Does It Really Cost to Run a Restaurant? – Eater