Stop worrying and learn to love the markets

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You just sold your stocks or investment funds in panic and then ran to the bathroom and locked the door for a couple of days. Wonderful! Nobody in the world has it all. The short-term correction was always going to happen. It was just a case of when and from what level. I am not one of those gurus out there who always feed investors with doom and gloom in order to sell my services. Equally, I hope others will not blindly feed investors with greed in order to sell their products or seminars well.


In the week through Wednesday, a record $30.6 billion flowed out of equities with redemptions in US large-cap, technology and health-care stock funds leading the exodus, according to Bank of America Merrill Lynch. The BofAML Bull & Bear indicator, a gauge of market sentiment, declined to 8.5 from 8.6 but remains in “excess bullish” territory, a sell signal for risky assets such as stocks.
Time to call a doctor, anyone? Uncertainty is never welcome in our show business. It is important to maintain a big picture perspective. Please do not take everything you read out there at face value or your life would be ruined. Panicky selling will always occur because of human nature. Nobody is going to kick the bucket. 

The real drivers in my decision making do not come and go with the daily noise. Temporarily out-of-favor markets of real value will deliver medium to long term. Never turn an investment into a trade and vice versa. They are very different animals. While trading focuses on short-term numbers, an investment is on a longer time horizon. Medium to long-term investors should not be alarmed but they will need to manage their risk more actively.

Even the best laid plans can go wrong. Also, do not kid yourself into thinking that you can buy right at the bottom. There are some investors who are addicted to “fun” of the action in markets and may be willing to risk by betting that they can get out well ahead of the crowd.

My suitcases are packed, the hotel is booked, and the limo is waiting outside. Before I hit the send button, love to learn strategic bond and absolute return funds. They may save your wealth, if not your life.

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