Last week was no fun as an equity investor, period.
As a value investor, it hasn’t even approached value.
I read this weekend where a well-respected money manager theorized that we may well see an event like 1987.
I lived through that and it was scary.
We dropped south and most were concerned that we were headed for a depression.
What happened was that most sold at the bottom and the market reversed from the October 19 selloff and climbed back by year’s end.
That was described as a V correction.
It scared many investors for a lifetime. If they had shown patience, they would have quickly recovered and then rewarded.
Let’s move however, to 2000, where that correction took a decade to recover.
Then you had the financial crisis of 2008.
Things are not always as predictable as some would believe. If you stayed with the S&P 500 index over that period, you would still be counting the chips.
There is always much to talk about in the markets.
There is more to talk about if you are a short-term trader, due to the recent market fluctuations.
With the country split down the middle politically, one side
or the other has plenty to criticize the other about.
There are much bigger issues in the hinterland to deal with, like the price of eggs.
In most cases, items cost more today.
It helps that my cash returns a yield higher than the inflation rate.
I am more attuned to watching what and if I purchase something.
I am of much older vintage and my needs are much smaller than that of my children with families.
In watching them, I see this country’s economy reward those with rising incomes.
It does not reward service jobs.
It seems that AI may be the future for more service jobs, leaving a large segment of our labor force under trained for where we are headed.
No matter the economy currently or in the future, we must make plans for what we set aside in savings.
Interest right now is your friend. It won’t make you rich, but it will keep your head above water for the near term.
I’m concerned there are investors who leverage themselves to maximize return on investment.
They made remarkable gains as the market moved up. They can do the same through options trading on the way down, but history doesn’t paint an optimistic picture. Leverage is wonderful when it is working for you and punishing to point of liquidation when it’s not.
We will lose a lot of investor money if we turn a correction into a bear market, whether it is short or long.
That has happened before and it will happen again. An old trite expression is that most investors sell at the bottom and buy at the top. Well, the top was a couple of weeks ago.
Over the last two-plus years, every pullback had a quick recovery. How long do you think that trend can continue?
What I watch is what really matters.
That is the earnings of companies which more than exceeded expectations. Most companies were conservative to pessimistic on projections for the rest of the year.
Given all that has happened with the current Administration over the last month, that’s reasonable.
I continue to sell into record levels and sit on cash that I would like to deploy, but still don’t find value.
While corrections or bear markets provide me opportunity, I take no pleasure in watching my portfolio value drop daily.
The only solace I have is that I done this for over 50 years and it’s not my first rodeo.
The only constant is change. Our enemy is impatience and our emotions.
Fear and greed drive this market.
Never forget that the only person who cares about your savings is you.
I encourage you to collect all the data you can but act on little.
Never forget that you need far less than you want.