Tough times are here, and it is hard for individual investors like us to keep a cool head.
Money is moving in and out of the markets so fast, causing huge swings up and down and all we can do is watch and hope it settles down soon.
Overall, I feel that the investors are getting bearish by the day. You start to see less calls on penny stocks on forums like Investingnote.com. Glove and mask makers are all the rage last month and they are long forgotten.. it seems like the downturn is less about the coronavirus and more on the economy falling apart.
To me, it is starting to feel like Dec 2018 again, or the great oil bust of 2014. It sounds like bad news, but in fact this is the time to deploy your cash and invest in quality companies. For example, many see crisis brewing in the airline industry, but Warren Buffet sees a bargain when filings revealed that Berkshire Hathaway bought nearly 1 million Delta Airline shares worth US$45mil last week.
This week’s decline has a panicky feel about it. No doubt about it. However, the time to sell was a couple of weeks ago, not today when you are holding the bag at a 20% loss. Instead of selling, it would be a better idea to stick to your own strategy.
My strategy is to go down with the market and keep buying the damn dip. I know it feels scary. It feels terrible. But investing is never easy, and going full panic mode right now is not the way to go. I have missed the 08/09 crash, froze (or rather, choked like Lebron in the 2012 NBA Finals) during the oil crash and waited too long to buy during the Dec 18 correction. This time round, I am a little more prepared and cool-headed to execute the plan.
Who knows, the market may shoot for the moon next week, or fall another 20%. In the long run, I believe that the market will continue to go up. So, I’m going to end this with an excerpt from a recent blog post by Reit dude which pretty much sums up what I’m feeling right now