The stock market kicked off 2021 with a swift 2%+ tumble. Ouch.
For anyone who follows the market, this doubtless brings back memories of March 2020. COVID cases were on a sharp rise, and the stock market bottomed out, with a 30%+ drop over the course of just a few short weeks.
A number of smart folks I know predicted at the time that markets would enter a prolonged slump, and that casual investors like myself would be best-advised to load up on safer assets like bonds to weather the storm over the coming years.
I didn’t exactly follow this advice: I did buy some bonds, but not a whole lot, and continued to plug away into equities. And I kept chewing over two quotes. The first was from Warren Buffet, who is known for saying, in his folksy way:
“Be fearful when others are greedy, and greedy when others are fearful.”
The second quote (I can’t remember who said it, but I think it was Michael Batnick, on Animal Spirits), is something like:
“Investing in an under-priced asset never really feels good.”
In order to make it easier to buy when everything is in the red, I’ve tried to internalize the idea of “stocks are on sale.” Those shares of Apple? They’re 2% off, today only! Imagine if you could pay $20 less for a $1,000 iPhone!
It makes investing when on the bad days feel a little easier. And it’s what I muttered to myself today, when I invested with everything in the red.
