Scary stuff, isn’t it?
The Dow Jones drops 1000 points in a matter of minutes, and you can feel the panic from investors.
To be honest, I actually didn’t see it. The market appeared to be having a really bad day without mistakes, so I went to the gym to blow off some of the volatility. I came back to emails and videos of mass hysteria. Technology certainly does nothing to calm the nerves as it relates to the markets.
What ended up happening is the markets logged their worst week in a long time (the excuse was Greece, but I’ve already been over that enough). Just looked like the markets were in the mood for a pullback. Still, the large increase on Monday and then the swing upwards yesterday could also exasperate investors.
This is where long-term investors tell you that it is important to stay invested. And they are right. The average investor loses out for precisely one reason: They sell in a panic, rather than with a disciplined approach. If you are a long-term investor who has no discipline, the best thing you can do is never, and I mean NEVER turn on CNBC, or Fox Business, or CNNMoney. These programs will give you a coronary, whether you are prone to them or not. Further, don’t check your account balances daily. The feeling of euphoria on “up” days, is half as strong as the feeling of despair on “down” days.
Seriously, stay away from looking at it. Even if you do it yourself. It’s not going to help you. If you have a plan, stick to it. If you don’t, get a plan. Because it is a sure bet you’ll fail if you have no plan. Once you have a plan, and don’t look at things on a microscopic level, you will be the one who can handle the volatility.