An endless responsibility

Here’s part of your responsibility – you cannot continually change your views about your investments based on what the markets have just done today. Cannot. You will chop your portfolio into pretzel nuggets. And then into crumbs and salt crystals. You cannot consistently sell down 4% and then buy back plus 10% when it feels better. You cannot allow today’s prices to dictate your feelings about tomorrow’s returns.

Unfortunately, this responsibility will remain with you forever. It’s not like a vaccine you take once. You need to swallow this pill every morning and sometimes in the evening. Fortunately, you really and truly do have this under your own control. You just have to work at it and not put yourself in a position to drop the ball. Not only can you control your behavior once you’re aware of it, you can control your environment and the various stimuli that you allow to bleed into the peripheral.

And if you’re paying attention to commentators who are overly focused on the action of each day, you’re poisoning yourself. Because every day is a new day, barely connected with whatever happened the day before. And worst case scenarios are the great, great exception, not the norm.

You look at the S&P 500 right now, down 5% from its recent record high, and you’re tempted to think we’re halfway there to a 10% correction – or a quarter of the way there toward a 20% bear market. But corrections don’t happen with any great frequency and bear markets are so rare that I can list every single one of them off the top of my head going back to the 1950’s, and I wasn’t even alive then.

Today the market will go up (down) and your brain’s chemistry will lead you to believe that this is meaningful, and that it’s likely to go higher (lower). You have to knock that shit off. It’s your responsibility. It’s an endless responsibility.

Three tricks:

Stop paying attention. Turn off all the notifications and headlines, delete the apps.

Hire someone else to worry about it for you. They’re a step removed from the emotions you’ve got intertwined with your life’s savings.

Read books about market history instead of news articles about market present. Most of the stuff you read in the Wall Street Journal will not be remembered in the future, will not be read about in books about market history even a decade from now. It’s almost all water under the bridge.

You have a better trick that these? Tell me about it. Send me a text @ 917-540-6095 !