A day or so ago, some kind poster talked about reading through all my end of month summaries from the beginning in Nov 2013. (See additional information on the right panel). It motivated me to do the same, just for fun. My end of Mar 2016 post linked to this post I had written on Mar 19 of that year. In light of the recent sell off’s we were having (nothing, by the way, like Feb 2016, not even near as bad, I thought this refresher might be interesting:
Totally, completely and absolutely WRONG!
Looking back now at just 5 weeks ago, when we were all so scared that a Bear Market was here, do you remember what is was like? The news was full of falling stock market stories. And China was collapsing, Europe was collapsing, Russia was collapsing, Oil was collapsing. Worldwide debt was going to kill us. Deflation was going to kill us (Funny, if debt was supposed to kill us, it should be inflation we should worry about, but Oh, well!).
A Zacks newsletter that I read sometimes which is supposed to be a “long-term" and “LONG(!)” newsletter, was breaking all its rules and buying ETF’s that were short the market to adapt to the “Bear Market”. Even the MF was running stories about how to survive the coming Bear Market. It was scary. I was scared too. I really was! It’s important to remember how scared you were this time, the next time the market is going down. It may save you from some irrational actions that you’ll regret afterwards.
And all these market timers we had never seen before turned up on our board saying that their Technical Analysis charts and metrics were telling them that the market was going to crash, it was going way down from there, there was no hope. And they chuckled among themselves about what poor naïve dopes we buy-and-hold people were. That was during the week JUST before the market turned up. Not one TA guy said his metrics indicated that there was a possibility that the market was going to turn up. So much for TA guided market timing…
It turns out that all those people saying you should sell everything and get into cash, were wrong. But not just a little wrong. They were completely, totally and absolutely wrong. It’s important to remember that the next time the market is going down, everyone is saying to sell, and you get that panicky feeling. That doesn’t say a Bear Market will never happen. It will! But trying to time the market is a losing game.
My bottom was Thurs Feb 11. My portfolio is up about 19% since then. That’s a bunch in five weeks.
The S&P 500 is up 12% since Feb 11, way more than its average gain in a year. It’s even up 0.3% on the year, after that terrible January and February. Sound like a Bear market to you?
The Russell 2000 Small Cap index is up 15.5% since Feb 11, again way more than its average gain in a year…
Etc… I hope that you stayed 100% invested through this, and didn’t get frightened into getting out at the very bottom.
Best to you all,