It’s only fair that SPDR Man makes an appearance in regards to what’s going on in the market today and what happened back in June. If you haven’t seen this meme before… check it out. You won’t be disappointed unless you have no sense of humor.
The market is selling off on good news today due to “fears” that the FED will have to taper sooner than later. Quite honestly, I’m in the sane boat that believes good economic news is a positive for the markets in the long run… fuck me, right?
The amount of emotional baggage investors carry during times like these can be detrimental to a portfolio’s long term performance. All of a sudden the knowledge we’ve accumulated over the years is meaningless as the urge to sell becomes too much to ignore. When you start to worry, you should ask yourself if you’ll regret your decision to sell 3-5 years from now, not 3-5 weeks from now.
Instead of hitting the panic button, stick to your script, your philosophy, your plan, whatever you call it. Take profits from your out-performers and re-allocate to those getting beat up by the market. If everything is getting beat to shit, re-allocate to those getting hit the hardest. You built a diversified portfolio for a reason. To lose sight of that due to short-term noise will only create bigger problems down the road. Those who remain calm and persistent will reach their goals in the end, and those who act on a whim will generally never be satisfied as they let themselves be consumed by the “what ifs.”
Aside from all of the noise out there, here are some things I enjoyed reading this morning:
- Krugmanites, FTW! (Krugman)
- Market Timing is never a good long-term strategy (Abnormal Returns)
- Home Builder Confidence increases in August (Calculated Risk)
- Is the market in consolidation mode? (All Star Charts)
- Uncle Sam doles it out (Dr. Ed’s Blog)
- Is the “Smartwatch Revolution” only a month away? (ValueWalk)
Stay vigilant and enjoy.