It’s fascinating how when the market keeps climbing, everybody wants a piece of the action. But the moment it starts declining, suddenly nobody wants anything to do with it.
This behavior is truly perplexing because we don’t apply this thinking to anything else we purchase.
If flight tickets to Tokyo dropped by 50% today, you can bet your last dollar that everyone in Singapore would be scrambling to book a trip to Japan.
(Context: we Singaporeans visit Japan so frequently that I literally can’t remember a single trip where I didn’t run into other Singaporeans at some random ramen shop.)
Yet when stocks go on sale? Crickets.
Bull Markets Make Everyone Brave
When I gave talks throughout 2024, attendees would eagerly approach me afterward with the same question:
“Should I just throw my entire savings into the market in one lump sum instead of dollar-cost averaging (DCA)? I read that lump sum investing outperforms DCA in most scenarios.”
I told them something they didn’t want to hear:
“You naturally feel an urge to throw everything in at once during bull markets. If we were in a bear market right now, you’d feel very differently about that strategy.”
For new investors especially, I recommend starting with small positions and observing how you react when markets move in both directions.
Because if you don’t learn about yourself first, the stock market is an expensive place to find out.
And trust me—you don’t want that tuition fee to be too expensive.
Volatility: Impossible to Fully Explain Until Experienced
Trying to describe market volatility to new investors is like trying to explain how a rainbow looks to someone who’s been blind since birth.
You can use all the right words, but until you’ve lived through your portfolio dropping 30% in a month, you don’t truly understand it.
The fear of missing out (FOMO) is a powerful emotion that overrides logical thinking. When markets only seem to go up, any cautionary advice sounds like pessimism from the sidelines.
There’s an old saying: “Don’t speak when angry; you’ll make the best speech you’ll ever regret.”
My investing version: “Don’t make large investments when caught in FOMO, because you’ll make the biggest moves you’ll ever regret.”
The Price of Peace of Mind
In an article late last year, I wrote about why I sold stocks to raise cash in “Why I’m Taking Profits in the Stock Market Now”:
“The rationale for this is simple: the last thing you want is to be forced to liquidate your portfolio during a market drawdown when everything is cheap.
While it’s intoxicating to watch my portfolio make new all-time highs and ride the market’s momentum, it’s just as important to stay grounded and follow my investment principles—even when it means going against the grain.
If I want to sell, I want to come in from a position of strength, do it on my terms, and in my favor. With the market trading at a 29x P/E multiple—one standard deviation above the 10-year average of 24x—it’s a good time to reassess and plan for the future.
As I expect significant expenses over the next five years, I will liquidate a portion of my portfolio to set aside cash for these costs.”
Obviously, some didn’t like what I did. I sounded like a party pooper amid the bull market intoxication.
But this comes from my 15+ years of experience in the market—I know that markets always move in cycles.
And right now, attractive opportunities have started to resurface again.
“This Time” Is Never Different
Some will say that tariffs of this magnitude are unprecedented.
But so was the pandemic. And the subprime crisis. And the dotcom crash.
Each crisis came with its own unique wildcards that sent markets tumbling.
This isn’t abnormal—volatility is a feature, not a bug of investing.
Any sound investing strategy needs to account for survivability through market cycles. The most financially disastrous results happen when your strategy only considers up markets, which often leads to:
✅ Extreme concentration in a handful of positions
✅ Excessive leverage
✅ Unthoughtful use of options
✅ Insufficient cash reserves for living expenses
To reap the rewards of compounding, we must first survive.
Peace of Mind: The Ultimate Investing Advantage
Because I set aside cash to cover my expenses over the next couple years, I’m extremely zen about market declines, even if they persist.
Market drops don’t affect my standard of living.
They don’t affect my state of mind.
In fact, they excite me—my shopping list is ready.
During a drawdown, peace of mind armed with a ready watchlist of quality companies is the best advantage any investor can have.
The seeds we sow today—during times of uncertainty—will define the quality of life and wealth we enjoy many years down the road.
Are you preparing to run for shelter? Or are you getting ready to plant seeds while others are fearful?