Keep Your Cool As An Investor

By now you probably know that the stock market has had a rough couple of weeks. I know I have spoken to many of you recently about the current state of the financial markets but I think it is an appropriate time to put things back in perspective.

Stocks across the globe have fallen over 6.5% in the past three weeks and U.S. stocks are less than 8% off their recent highs (10% as of this morning). For comparison sake, the U.S. stock market dropped over 50% in the Great Recession. Technically, you don’t call a stock market drop a correction until a 10% loss and bear market until there is a 20% decline. As you can see, we still have a ways to go before we get there, if we get there. This is the 28th 10% correction since World War II.

In order to be a successful long-term investor, there are critically important investment principles that we all must adhere to. Please watch this short video I made for you as a reminder during times like this:

Remember, it’s not about being a cool investor, but keeping your cool as an investor. Please. No matter what happens, stick to your plan. It’s the most important piece of advice I can impart. Panic selling your investments puts your entire financial future in jeopardy. Yes, it feels dreadful when you read the headlines, but this too will pass. Those of you who stick with your investment plan will be rewarded when it does.