Don’t you think the best investors have a calm and collected point of view when the stock market is in turmoil? The only people that seem to get hurt when the stock market is on a roller coaster are the folks that get off while the ride is still moving. It’s far too common for people to buy at the top only to sell at the bottom because they didn’t have the stomach for the volatility.
Remember during the Great Recession when Warren Buffett was buying companies and lending money left and right? Almost seven years later, he is still reaping rewards from Dupont. He is making $8 a second because he didn’t panic.
The Epic Election of 2016
Speaking of panic, the election is finally behind us. I think many of us are thankful that it is FINALLY OVER. Whether you are happy with the results of the election or not, I am excited that I don’t have to watch a single campaign ad for a long time.
Through this election cycle, I’ve realized that sometime sI let my emotions be affected by the roller coaster of life. Whether it’s checking the stock market multiple times a day, bringing stress and worry home from work, or even the results of the election. I know I can’t control what happens around me, but I want to start taking a stronger grasp over my emotions.
Social Media Bantering
Right after the election, my Facebook feed was filled with people lamenting or celebrating the results. I had some friends that basically said if you don’t agree with me, unfriend me because you’re intolerant to my views. That seemed a bit extreme to me. I’m not sure living life in a vacuum to avoid hearing different perspectives is wise, but that’s their decision, of course.
Yes, I have friends on both sides of the aisle, and like most people, I don’t agree with every platform from either party. But, I do feel it’s necessary to hear differing views. While it would be convenient for everyone to see everything the way that I do, it definitely makes for a more interesting society with such disparity in viewpoints.
With that said, reading some people’s comments on the election made my blood boil. But, I didn’t think it would do any good to publicly disagree with someone on their Facebook wall. In actuality, I didn’t partake in any political talk on Facebook. If someone wanted to know what I thought, I’d freely share in person when we could have a civilized conversation, in contrast to the dumpster fire that I saw many posts evolve into.
From my experience, being open to hearing other’s perspectives many times can open my eyes to things I may have never considered.
This cartoon pretty much sums it up for me.
Finally, my Facebook feed is slowly filling back up with baby pictures, vacations photos, and talk of the upcoming holidays. Thank goodness some of the hatred is decreasing.
For those that follow the blog, you know I am not super excited to show up to work every morning. It’s not that I hate my job as much as I feel like I’ve grown as much I can in my office. This isn’t a big secret. My manager is well-aware from our latest conversations.
I’ve been actively networking for the last couple of months, and I plan to apply for a new job in the next couple of weeks. While this new job is out of my comfort zone, I’m hoping to take on the challenge in this new role.
Only time will tell if I actually receive an offer, but I am nonetheless excited about the opportunity to hone my interview skills and take a step out into something less traditional than financial accounting.
If I don’t receive an offer though, I am going to work harder this year to stay steady at work and not let the highs and lows of my work day affect me. I have a tendency to bring home some work stress that I’m sure my wife doesn’t appreciate. Maybe this is the year that I start working out right after work, so I have an hour to decompress before coming home.
Stock Market Volatility
One of the things that I have been getting better about is not worrying about the stock market nearly as much. I use to check Personal Capital multiple times a day on the weekend to see how my brokerage and retirement accounts were doing. Of course, this was an incredible time-waster as the market doesn’t move on the weekend. I wasn’t gleaning any new information by checking. In hindsight, I don’t know what I was thinking. Please don’t do this. Trust me, your account will not take wild swings on the weekend 🙂
Uncertainty with the Election
In a previous post, I discussed what impact the future President would have on the economy and how the stock market would fair. The market thought that Hillary Clinton was going to win. This was evident when the FBI started to investigate her again days before the election, and the market started to descend. When James Comey of the FBI declared that they were discontinuing the investigation, the market went back up.
So when Donald Trump appeared that he was going to win the election, the Dow futures plunged by 900 points since the market had not priced in a potential Donald Trump victory. Futures traders were caught flat-footed, just like Brexit. However, by the time the US stock market opened, information had been gathered to show that that was overblown. So, the stock market opened up by 40 points and closed the day above 250 points.
For investors, this was quite the ride. I know at 1 am EST, I was quickly seeing if I had any available cash to buy the S&P 500 on the cheap. For the most part, I have talked about how I am big into dollar-cost averaging.
For those that are not familiar with this terminology, it just means that you set up a certain schedule in which you buy shares of stock/index funds on a specific day (or days) each month with the same amount of money. The most common example of this is when an employee contributes to their 401k, making contributions every two weeks or twice a month depending on when their employer pays them. Same concept.
With that said, I had a bunch of friends at work ask me if they should jump out now since the market is volatile. My answer is always the same, if you don’t need the money now, don’t stress about it.
Before the results of the election came through, I spoke with some family members who were a bit worried about what the market would do. I told them that I was anticipating things to be choppy for a while but advised them to hang tight and get any extra cash ready for some great buying opportunities.
As you can see, I wasn’t so accurate with my prediction. I don’t think anybody would have predicted that a Trump win would make the market plunge 900 points only to be up 250 points later. That’s more than a 1000 point swing in less than 24 hours.
But I’m not the only one. Nobel Prize winning economist Paul Krugman wrote, “If the question is when markets will recover, a first-pass answer is never.”
It’s clear that I’m not the best at predicting the market. But, my obsessiveness is waning, which is probably for the best. I’m hoping to keep improving in this upcoming year. What are some things that take you on a roller coaster of emotions that you’re ready to leave behind? Share your thoughts below.