As you can see, over the years, stuff happens. A LOT OF STUFF!
And while the stock market tends to digest “stuff” by selling off in the short-term, in the long term, all these temporary setbacks do is provide an even better time to…you guessed it…buy more stocks cheaper than otherwise would have been the case.
To be sure, I’m not being flippant here. A few days ago, my personal portfolio had one of its worst days — if not the worst day — that it’s ever had. However, what’s crucial to one’s long-term investing success is how days like these are managed.
Ideally, we’re able to play offense and at least begin an ownership stake in a company – or five – that we’ve long craved. Or add to existing positions that we’ve been keen to beef up on.
But the table stake reaction is to simply ignore the sea of red that exists. After all, navigating volatility is the price of admission when it comes to investing in stocks.
Most importantly, panic is not an option.
Especially because we can say it's likely that this too shall pass. Just like all of the other “stuff” that’s happened over the years.
To further ease these situations, take the following piece of Foolish investing guidance to heart:
Not a single penny that you might foreseeably require within the next five years should be invested in the stock market.
Read it again. Memorize it. Get it tattooed on your forearm. In my opinion, this is the best guidance we’ve ever provided.
Because with that in mind, it helps shoehorn you into the long-term investing mindset that we so vehemently encourage.
A mindset that will allow weeks like these to roll off one’s back like water off a duck.
We don’t know the specifics of what tomorrow will bring. Or next month. Or next year. Heck, we don’t even know what’s going to happen this afternoon.
What we do know, with great certainty, is that “stuff” is going to happen. And that in five years time, North American stock markets will almost assuredly be higher than they are today based on historical trends.
With that in mind, licking one’s lips is perhaps the most appropriate response to times like these.
To take advantage, I invite you to join Stock Advisor Canada for the incredible price of $199 for three years (it’s normally $199 for ONE year). This offer also comes with a special report, Made in Canada: 5 Homegrown Stocks Ready for the “Buy Local” Revolution, at no extra cost – this report is not normally included with a Stock Advisor Canada membership.
With your Stock Advisor Canada membership, you'll get:
