The market has been volatile. For example, the extreme daily up-and-down moves of the Dow Jones Industrials Average (DIA) are shown in the following chart. And that is a 30-stock index! Individual stocks, such as Ventas (VTR), New Residential (NRZ) and most energy names, have experienced daily moves even more extreme. The three main causes of the volatility are (1) The Coronavirus, (2) Plummeting Oil Prices, and (3) A market that was richly valued and looking for an excuse to pull back. And pull back it did.
The main point of this message is to remind readers to NOT make silly mistakes. But instead, to stick to their long-term strategy and goals. Unfortunately, market volatility like this is a time when lots of investors make ugly mistakes. Perhaps most commonly, they panic and sell, and end up missing out on the subsequent rally. The number one thing you can do as an investor right now is to stick to your long-term plan because, as they say, this too shall pass. And it will. And when it does, everyone will look back with 20/20 vision and proclaim how foolish it was to sell.
Don't get clever.
Don't be foolish.
Stick to your disciplined strategy.
Sit back and relax as others make all the absurd trading mistakes (fear and greed) because you don't have to. You don't need to. You don't want to. Take comfort knowing that when this batch of volatility passes, you will have survived unscathed by the foolish trading mistakes that so many others are making right now
This market is ugly. But it will get better.
Disciplined, long-term, goal-focused investing has proven to be a winning strategy over and over again throughout history. It will this time too.