Monday’s stock market “crash” ended as quickly as it began.
The Nikkei tumbled 12.4%, and the Nasdaq lost 3%.
Echoes of recession were trending, and whispers of a huge looming bankruptcy grew loud.
When I said, “I’m going shopping in the stock market” on Monday (there’re interesting opportunities outside of the Magnificent 7), I received a reply from a reader who talked about the Fed, dollar shortage, banking crisis and mentioned that I’m being myopic for buying stocks when the market dips.
When I started investing in 2008, everyone said the markets are volatile and we should wait until things are better.
Many people still say that whenever the market dips.
There will always be intelligent-sounding excuses reasons to stay out of the market.
But here’s the truth: Opportunities and a rosy outlook never go together.
They don’t ring a bell at the bottom (or at the top).
Frankly, I have no idea what’ll happen over the next week or next month.
But if you hold a long-term view like I do, then many things become noise.
Before I end off, I came across an interesting short story by Morgan Housel (highlights are my own):
Demographic historian T.H. Hollingsworth once published an analysis of the life expectancy of the British peerage. It showed a peculiar trend: Before the 1700s, the richest members of society had among the shortest lives – meaningfully below that of the overall population.
How could that be?
The best explanation is that the rich were the only ones who could afford all the quack medicines and sham doctors who peddled hope but increased your odds of being poisoned.
I would bet good money the same happens today with investing advice.
People enjoy complex, intelligent, and sexy advice on health and wealth.
But what usually works are the simple things. Sound investing is simply buying something for less than what it is worth.
Compound steadily,
Thomas