Monday Morning

Investments, bear markets and net worth

So, as most of you know, the stock market has been on a major tear lately. Actually, not just lately but since the Great Recession way back in 2008-2010.

Even so, the law of gravity states that what goes up must come down. And this doesn’t just apply to apples but to stocks as well.

Before you call me pessimistic, realize that this is almost always a good thing. I look at bear markets (a drop of 20% or more) in the same way I look at weight loss: It’s healthy and it’s a way to shed some fat. A couple of tips for the inevitable when it occurs:

  1. Look at your investments when prices are rising and close your eyes (meaning never check your balances) when prices drop significantly.
  2. When I calculate our net worth, I like what I see. However, what I’ve been doing lately is taking that number and chopping 30% off the amount. This helps me mentally prepare for future drops. I then ask myself, “do I still feel good about where we are?”
  3. Another way to look at this whole gravity thing is to think of a bouncing ball. The ball hits the bottom and then always bounces back.

Stay the course.

Consider initiating a trade

Any sports fan out there has heard of a talented player who people said performed below expectations. Then, for one reason or another, they get traded to another team. As a result, there’s new management, new teammates, and a new culture, and their performance suddenly rises to a new level.

Fit matters. Who you surround yourself with matters. If things are getting stuck and you’re falling short, consider switching to another team and see what happens.

Quote

“Fitness doesn’t equate to performance.“ Justin Metzler, Ironman Triathlete 

The training. The numbers and times. The nutrition. They all point to a certain level of performance come race day. But the body is much too complex and intricate to offer complete predictability. Just when you think you have it all figured out, the body is there to remind you that it has a mind of its own.

This is what Justin Metzler was referring to in his comment.

I know this first hand from one marathon in particular, NYC, where I crashed around mile 16. Hitting the proverbial wall with 10 miles to go is an utterly hellish place to be. Despite all of the effort I put into preparing for that race, my body had other plans that day.

While you can control much of what goes on with your body, there will always be unknowns that can screw you up come race day. You’ll try to explain it to yourself and others but at the end of the day, some things just can’t be explained. Accept it, chalk it up to a valuable experience, and move on.

Have a great week everybody,

Rick

1 thought on “Monday Morning

  1. Good Morning!

    I hear what you say about the bearish markets.

    WE didn’t start investing (In index funds) till just before Christmas last year (2020).

    In hindsight (a great thing) we should have started investing at the beginning of the pandemic, instead, we ploughed money in to our emergency fund.

    Since work security increased rather than decreased, we then began investing that rather significant sum in small packets over the last 6+ months. the growth has been phenomenal – 10% over that period in fact. As you say – too good to be true.

    Imagine what the growth would have been if we had invested instead of squirrelling the money away?

    As for your marathon running ways – I’m seriously impressed. A school friend of mine (an oncologist now) runs too (I’m not sure if it’s marathons). Not my thing but I sure do respect those that can!

    Well done.

    Hope you’re enjoying your summer

    Shaun

    Like

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