Volatility, thy name is “Stock Market.” Trade War got your portfolio down, up, down? Is “a little squabble” massacring your portfolio, or your peace of mind? What’s an investor to do? Grin and bear it?
I’ve Got News For You
It’s true, volatility comes and goes. Like the weather. Some days the weather is mild, other days it’s severe. Sometimes it is cloudy, some times it storms. That’s all the nature of weather.
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It’s true, volatility comes and goes. Prices on the stock market vary. Actually we should say “the stock markets” since there are more than one. Prices will vary. Or as J. P. Morgan is reputed to have said when asked what the stock market was going to do:
“It will fluctuate.”
It’s been said that his market forecast is the only one that is always right.
No One Knows, Forever
No one knows what will happen in the future. Anyone who says they know is lying.
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The market is always a casino, sometimes a roller coaster.
Dividend Focus
As mentioned, I am focused on dividends. That is not to say that the price of a stock is unimportant. On the contrary! The price of the stock is highly important for the reason that one could be overpaying, which one should avoid if possible.
And even after I own a stock, I continue to keep an eye on the price. One simple reason is to evaluate if I wish to buy additional shares.
Back To The Present
The recent “Trade War” volatility is just like all volatility: it is part of the natural gyrations of the market system. Of course there are external factors that aggravate, precipitate, and trigger market movement.
Since market declines are “normal,” what should we do? Can we accept the volatility? Can we stomach the declines?
If we look at who causes volatility, we know it is not long-term investors. It is the trader who trade every day, or even multiple times a day., as in Who Causes Market Volatility?
When declines occur and people start to panic, I am reminded of a saying,”If you can’t do the time, don’t do the crime.” If we cannot stomach declines, we don’t belong in the stock market.
No one likes to be on the scary side of a market decline. But if you are a long-term investor like I am, keep reminding me the famous quote: “Time in the market beats timing the market.”
How do you cope with volatility? Comment here: Contact.
The map of the world “Nova et accuratissima totius terrarum orbis tabula” by Joan Bleau (1596-1673) was issued between 1648 and 1664 in Amsterdam. Courtesy New York Public Library.
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