Let’s pretend! Let’s pretend that a market correction won’t happen, and that our stocks will grow to the sky!
Back To Reality
A market correction is inevitable. Stocks go up and down. Many people go about their daily life thinking that times will get better automatically. Well, let me tell you: they are half right.
Now and Then
These words, “A market correction is inevitable” are not meant because of any condition or conditions in the market at present. The same words can be said a decade ago, two decades ago, and so on. And at any time in the future as well. It is just a fact of life, like sooner or later it will rain. We might as well expect it, prepare for it, and accept it.
If I arrange my life with expectation that it will never rain, I will be shocked and unhappy when it does finally happen. I could say I was ignoring the reality of the world we live in. So why should assume a stock market correct will never happen?
For me, avoiding getting swept up in the latest fad is as important as any other activity. I aim to keep on keeping on. I am mainly a dividend investor. I buy for income.
My Expectations
I expect that most companies I have stock in will continue to pay dividends. I expect that the income I get will continue to grow. Some stocks will rise in price, some will fall. Some companies will grow and do well, some will falter. Some will go out of business. Some will spin off new companies. All of this is normal.
Of Course
Of course I have no guarantees. Everything could go to hell tomorrow. Or worse, only part of everything could go to hell tomorrow. I have no idea what will happen, and neither does anyone else. Certainty is impossible and the future is unknowable. Anyone who claims otherwise is a charlatan.
What We All Know
Death and taxes are the most common inevitabilities. Others include aging, weeds in the garden, and market corrections.
Things happen. I certainly would like to be prepared, but I don’t live my life in a box of packaging. So while I know that market corrections are inevitable, I feel comfortable with the unknown of when.
During the most recent corrections, I did not sell. I bought. In my view, if one sells during a market decline, one is timing the market. And locking in loss. And since we know that time in the market beats timing the market, I’m sticking around.
Who
And from my view, market volatility is not caused by investors, as detailed in Who Causes Market Volatility? So for the most part, daily market noise, is just that: noise. It is there to be ignored.
Are you allowing yourself to be ready for the next correction? Let me know here.
The illustration is from a Japanese catalog of fireworks, ca. 1880s. Courtesy Yokohama City Central Library.
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