A lot of others were nervous about how the tariff stuff would play out.
Predicting what will happen while you’re in the midst of a downturn is often times just as hard as figuring out when a downturn will commence in advance.
When stocks are falling it always feels like it’s too late to sell but too early to buy.
This is why it’s best to take the timing out of these decisions. Invest on a regular schedule. Create a portfolio that fits with your risk profile and time horizon. Set an asset allocation that you can stick with when stocks are rising, falling or going nowhere (because they will do all of those things eventually).
Staying the course worked yet again.
Investors who panic sold now regret that decision.
Those who held on or added to their stocks when they were down are feeling much better than they were in April.
Staying the course won’t always be this easy.
Eventually we’ll get a market environment that’s more challenging without the benefit of a V-shaped recovery. A Recession. An extended bear market. A financial crisis.
These things are rare but do happen.
To be a successful investor over the long haul you need to stay the course during those painful periods too.
You also can’t spend your entire life worrying about events that happen ~5% of the time.
Most of the time the world doesn’t come to an end.
A Wealth of Common Sense is a blog that focuses on wealth management, investments, financial markets and investor psychology. I manage portfolios for institutions and individuals at Ritholtz Wealth Management LLC. More about me here. For disclosure information please see here.
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