Don’t You Dare To Sell!

This is not Monday morning quarterbacking.

Again and again in history, investors could not keep cool during the market volatility (not “meltdown”) almost always regret their decisions.  Today, the one thing that anyone should do is “nothing,” not like anything you do will help.  We often act as if our personal decisions will alter the overall stock market movements.

Why do you think that while the stock market return is on average 7-8% a year, but average investors only got 4-5%?

This is one objective perspective:  Today, we are NOT in the 2001 internet bubble.  We are NOT in the 2008 housing bubble.  The reason why it took some time, say one and half year, for both markets to recover then was because that both markets were “bubblers” to start with.

In comparison, what do you have to complain about the state of the economy, the employment is back to pre-2008 level, the interest rate is still virtually zero, and the inflation is non-existent?

Just a few years ago, the gas price dropped below $2.00 a gallon was something to celebrate about, and now it became the nightmare for the stock market.  After a near 150% stock market rebound since 2008, it is quite normal and well expected that a 15-20% correction is in order – that is exactly what happens now since the high of summer 2015.  For the last few trading days’ near -5% move while there were no new news about anything fundamental would suggest that it has been a result of simple panic liquidation from some investors.

For people who don’t need money today, the best advice I can offer is to turn off the CNBC or radio because media is a sensationalizing momentum player.  For people who needs cash flow from your pension right away, instead of selling stocks in your pension account (BTY, why don’t have enough cash position already in your pension account?), get a loan from someone to get by.

Take an aspirin and call me in the morning.

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