Use it

Nice bounce in the Nasdaq / ARK stocks / tech names etc this morning.

If you were extremely uncomfortable with the drawdowns in your stocks this week, use it. This is your chance. If you felt overexposed to one particular sector or theme or whatever, chances are it’s very green today. Sometimes markets bottom but sometimes the sellers just take a break. It can be tempting to imagine that name you have a 40% drawdown in coming all the way back and then selling when you break even. This happens sometimes but not always. You know this to be true from your own experience if you’ve been around for awhile. Let this serve as your reminder if so.

No one should have an allocation that keeps them from sleeping with the S&P 500 only a few percent off an all-time high. No one should individual positions so large they cause a loss of appetite or an obsession with logging in to a brokerage account.

If today’s bounce follows through into tomorrow, great! If it leads back to new all-time highs again, even better. For many stocks, it won’t.

Here’s what today’s bounces look like on a one month chart – far less impressive:

I’m not giving you a market opinion here. I’m giving you a regret minimization tactic. Regret minimization is how you play the long game.

There are a lot of people who don’t even know what their allocation “should” be, because they’ve built a portfolio without having any sort of plan for what they want to do with their money, when or how. We can help with that.

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