Bear runs are not a permanent feature and provide the best time to buy those shares.
Everyone experiences the blues from time to time. Whether it’s Hump day, bear market or heart break blues, it’s all the same thing (though intensity varies)—feelings of tiredness, loss and uncertainty. What to do? Curl up in bed or rise and put up a good fight? Choice is yours. As for me, I’m choosing the latter.
Today, I share my shoo-away-blues strategies. Of course, I’m no shrink, but I am going to try dispense some hope. Ready?
One, bear markets don’t last forever. Yes, no one can predict precisely how long they will run, but typically they don’t last longer than bull markets.
So, while you might not particularly like to look at your investment statement at this time, you can take some comfort in knowing such downturns are a normal cyclical phase of the investment landscape.
Take for instance, the last bear that emerged from hibernation in April 2015 and stayed on the prowl until early May 2017. It was eventually “chased back into the woods” and markets soon after rallied to two-year highs. Likewise, once the 15-month bear market that started in January 2011 was done, a raging bull market ensued afterwards lasting 36 months.
My point; bad times don’t last forever.
Two, bear markets are great buy markets. They present good buying opportunities. Yes, this may seem counter-intuitive but it’s the only way to make money. Sometimes flawed intuitive understanding of a situation may lead to counter-productive behaviour with undesirable outcomes. This is the case here.
Remember Baron Rothschild (the 18th Century British Nobleman and member of the Rothschild family) oft-quoted saying “the time to buy is when there’s blood in the streets, even if the blood is your own.”
Rothschild made a fortune buying in the panic that followed the Battle of Waterloo against Napoleon. The point is the worse things get in the market, the better the opportunities are for profit.
Three, try a fun thing this season. I reckon psychologists favour this; trying an activity that’s just plain fun, no matter how silly. For some, maybe its Sudoku puzzles, read a book or joining a salsa club. Me? I have a few documentaries I love to watch over and over, like a favourite piece of music.
Been also thinking of playing tricks on my mind such as hanging the “bear chart” back-side front—not sure whether this’ll work. In all, the point is that by the time you’re finished indulging in your little de-stressing activity, those drifting blues would’ve lifted away.
To close, I know it can get tough watching markets dislocating in front of your eyes. Some of us may need strategies to beat the blues. It’s important to maintain focus at all costs.
Let me end this with a market joke from Jay Leno. “The stock market crashed this week, but the market analysts are not calling it a crash. They’re calling it a correction. ‘Oh, shut up! A correction. You never hear that at NASCAR.
‘Oh, we had a fiery correction on turn three. Four men are dead”
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Note: The results are not exact but very close to the actual.
