Who: Public equity market participants.
What: S&P 500 down 4.6% on the day.
When: Monday February 5, 2018
Why: Rising bond yields was the claim…
The S&P 500 is down 4.6% after trading closed on Monday, continuing a two-day slide. How are we doing out there folks? If you are feeling nervous it might be a good time to turn off your computer or television and go outside.
This is when your stomach will be checked for investing in equities. The reality of the situation is you will see many scary headlines such as the following below.
For those that follow Damn Millennial on twitter you would have seen the quote of the day on Saturday morning.
“Unless you can watch your stock holding decline 50% without becoming panic-stricken, you should not be in the stock market”. -Warren Buffett
Reread this again and realize that the public equity markets are risk assets with historically high volatility. You must accept that it will be a wild ride and what we see one year will look different then what we can expect to see the next.
The ride is a random walk and we all must embrace this. Hopefully you caught the 5 things to do when everyone is getting rich post and acted accordingly. If you your asset allocation is to aggressive you will be able to tell today by your emotions.
I recommend you stay the course, stick to your plan, and avoid the noise.
What Are Your Thoughts?
- When the market has a strong drop how does it effect you psychologically?
- Does a move of over 5% in two days make you change your strategy?
- How will you feel if the market is down another 10% by the end of the week?