The stock market has been trending downward for the past few days. Institutional investors are clearly panicking, driven by debt crisis warnings, the AI revolution, and uncertainty surrounding the DoD budget, to name a few. But does it really matter? Should you sell now and take profits? I’m sure these questions are on many investors’ minds.
Everything matters, but what truly counts is how you respond to the information you consume. Staying informed and doing your own research is essential, but selling out of fear to avoid further losses is rarely the best option.
I’m not saying everything will be fine; no one enjoys watching their portfolio drop. But timing the market is a fool’s game. There’s no point in stressing to where you make irrational decisions. Stay level-headed, trust your strategy and financial plan, and make moves based on logic, not panic.
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What Can You Do About It?
Absolutely nothing.
The first thing is to stay calm and avoid stressing over things you have no control over. Constantly checking your investment account will not make it better either. In other words, if you’re investing for the long term, a short-term volatility event shouldn’t phase you out.
In the long run, short-term volatility shouldn’t shake you.
After five years of investing and absorbing insights from countless books, articles, and blogs from seasoned investors, I’ve realized there are more effective ways to spend that time because, regardless of what we do, the market will always do what it does best.
Build New Skills
I bet there’s something you’ve always wanted to learn but never made time for. Why not start now?
For me, it’s coding and artificial intelligence. Lately, I’ve been diving into Python programming and learning how algorithms work. Online courses have made it easier than ever to pick up new skills.
Try this:
- Write down five things you’re interested in learning or improving.
- Narrow it down to your top three.
- If you could only choose one, which would it be?
Make that your main focus.
Stay In The Market
The longer you stay invested, the better off you’ll be. History has proven this time and again, and I believe it’s the path many of today’s wealthy took years ago. Any irrational decisions you make will impact your portfolio in the long run—there’s no doubt about that.
“Great investment opportunities arise in times of chaos and uncertainty.”
–Charlie Munger
In fact, if you have cash on the sidelines during times of market uncertainty, now is the best time to either grow your positions by dollar-cost-averaging or introduce new ones.
I started my taxable investment account during the last market crash, and I have no regrets. For long-term investors, it’s important to remember: the money you invest today should remain untouched until you truly need it.
Stock Market Resilience
It’s not enough to simply stay calm and carry on when there’s so much uncertainty in the stock market. Analyzing market trends and considering the broader context is essential. While perfectly timing the market may be unrealistic, it’s definitely possible to see its potential direction.
While many of my peers avoid market news, I don’t mind keeping up with it because it doesn’t influence my decisions. I’m still comfortable with a 100% stock portfolio in my 40s, though I recognize that my approach might evolve over the next decade. At some point, I’ll start looking into bonds as part of my strategy.
No matter how the market moves, I remain committed to my strategy, consistently allocating a portion of my income to my investments. You should too.
How do you maintain peace of mind while investing in the stock market?
