Today felt different...after a long time
Markets: Investing comes with emotional highs and worrying lows
Yes, we are investors and we love what we do. We invest to ensure that we can live a comfortable, enjoyable life, well into retirement and to help our loved ones achieve their personal goals - career, homes, families and passions.
But, we are human beings too. We crave success - without it’s promise, there is no point in trying.
I took a sabbatical from golfing after our 2nd child was born - I could not justify spending 5 hours away from the family on the weekend. I remember the sweet feeling of a birdie, the elation of the one time I eagled a hole and the immense frustration of multiple double boggies. I was not very good at the game.
Nevertheless, golfing is like investing. That one great round, that one lovely birdie, keeps drawing us back to the course to replicate that feeling of joy. In investing, that one multi-bagger, that one awesome, fucking trade, makes believers of us and we try to make it happen again.
2023 was great for our portfolios. 2024 was another fantastic year for our investments. We wrapped up last year and entered the new year full of hope for the US economy, for US businesses, for our stocks.
But recently, more specifically…starting last week, worries started creeping up on the horizon. And after a week of down days, our portfolios are starting to look like the set of the Walking Dead - corpses all over with brains and guts strewn around.
So how can we stay positive in this situation? What should I do and not do?
Here is what I am doing:
Cash that I need for my living expenses for the next 3-5 years - I am not touching those funds. They are in a separate account and I do not dip into those funds for buying stocks.
I am not using leverage or margin or even taking out any sort of loan to invest in the stock market. I consider all of these sources of cash detrimental to my financial health, especially given today’s elevated interest rates.
I am not wearing my investor mood on my sleeve. I wrote about this a few years ago. One of the many investing lessons I learned from my Dad. My loved ones do not follow the daily market gyrations and they do not need to get an update based on my afternoon/evening moods.
I am grateful for the many blessings in my life. I do not live in a war zone. I am surrounded by family and friends who love me. I have a roof over my head and food on the table. My extended family live in peace, joy and good health.
It is so easy to get demoralized by all the RED on the screen. Folks on online forums are scared, worried and confused. The CNN Fear and Greed index as well as the Crypto Fear and Greed index, both, hit Extreme Fear levels today. It feels different.
The best thing I can do in this situation is to develop my tactical portfolio plan and to execute it. I mapped it out 10 days ago and since then I have been working it. No emotions, no drama, put in the buy or sell orders and let them do the work. I don’t even need to stare at the screen all day.
Most importantly, I manage my RBF (resting bitch face) mood in front of my loved ones.
Love how you drew the parallel between golf and investing. The mix of highs and lows makes the journey so addictive, doesn’t it? That single win(a birdie or a multi-bagger) keeps us coming back for more, hoping to replicate that magic.
Your approach to managing market volatility is exactly what many of us need to hear right now. It's easy to get caught up in the fear and doom scrolling, but your reminder about focusing on what we can control, like having cash for essentials and sticking to a well-thought-out plan is invaluable.
Just read the 2 comments below and agree with all that is stated here. If nothing else I have learned the amount of time and effort I want to commit to being a good investor. This has allowed me to be strategic and tune out much of the noise. It's just part of what I do, not the 'thing' I do, and I am more comfortable with this distinction as I go forward. Believe it or not, it's kind of fun!