Back on The Rollercoaster - Holdun

My 5-year-old twin grandsons encouraged me to go on the Thunder Mountain rollercoaster ride at Disneyland last month. I only went because my wife refused to go and I didn’t want to disappoint them or, more embarrassingly, appear cowardly. Moments of sheer exhilaration were quickly replaced by terrifying drops, not what I had wanted to experience, which leads me quite naturally into the state of equity markets.

After 9 years of almost uninterrupted advances, that exhilaration has given way into those terrifying drops, the likes of which we have not experienced for some time. What’s an investor to do?

The important things to keep in mind are contained on the single card below which I have kept on file.

 

https://www.marketwatch.com/story/panicked-about-a-stock-market-crash-what-you-need-to-remember-can-fit-on-a-single-notecard-2018-02-08

Just remember, over the long term, markets declines are erased by the general uptrend of equity markets. Think back to March 2009 and where we are today.

The key is to avoid making portfolio decisions based on wild swings and terrifying drops. Research has repeatedly shown that those investors who trade excessively tend to experience much worse performance than the buy and hold investors who sit tight and reap the benefits of compounding as we do at Holdun.

Repeat after me; 

Never make decisions based on emotion. 

Turn off the TV. 

 Don’t check your account.