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I’m going to curse myself, question my own intelligence, spend nights sleeping poorly, and firmly consider the wisdom of “stay the course” as no more useful than a chocolate fireguard. Checking my portfolio balance will become a preoccupation to make myself nauseous.
The market is at an all-time high, every metric is stretched, and knowing how I’m going to react come the inevitable correction, I’m still not changing my asset allocation. But I have made preparations—I’ve purchased sick bags.
My reaction to the “big drop” is going to be mirrored by many throughout the world. The gnashing of teeth will become audible, a constant background noise to our emotional pain, but strangely enough, this massive correction will only affect us “sophisticated” investors.
The vast majority will maybe see something on the news, probably just before switching over to the big sporting event. Our front-and-center pain will pass them by. Lack of financial interest will be their savior.
Unknowingly they will practice the art of “tuning out the noise.”I wonder, who really is the “sophisticated” investor? Those of us who protest the inevitable, or those who ignore the volatility—maybe by indifference, but definitely by choosing to get on with life?
Is the checkout clerk who never looks at their 401k balance practicing a more advanced form of investing than those of us obsessively tracking every market move during a downturn? Maybe we should endeavour to embrace some form of “ignorance is bliss”.
Mark:
Excellent question. My response…stay the course.
When you have your retirement income 100% guaranteed (in our case, through social security and annuities), market fluctuations, while irritating, have no direct impact on your day-to-day lifestyle, but they do sometimes interfere with your ability to enjoy life.
Although our income is not affected by market fluctuations, it remains very difficult for me to watch our portfolio decline significantly once you are retired. When that happens, I remind myself of 2020, when a $260K loss in March-May resulted in a recovery by year’s end and resulted in positive results for the year.
There are opportunities, even if the inevitable bear market has us gnashing our teeth:
I am far, far more concerned with my health experiencing a negative correction, i.e., a serious illness or condition, than I am with the market taking a nosedive.
Market goes up, and the market goes down. Rinse and repeat. But when your health takes a serious downturn, it doesn’t always recover.
Amen John. I regularly get my checkups and Iother than being oberweight, I don;t have any crionic illnesses that are not managed (Elevated BP, GERD). I do have a hyatal hernia and a stone (can’t remember, but I think Gall Stone,) but my surgeon recommend NOT to do surgery, as neither is causing any issues.
Like you, I am more focused on my health than my portfolio.