Yay! I have been kinda looking forward to this… I wished for a market correction from my last post…
Dow dropped more than 8.5% last 5 days.
TSX dropped more than 4.5% for the same period.
One of my major American stocks Alphabet dropped more than 10% for the same period (I thought Alphabet had a pretty good quarter but does not matter. It just crashed just like other stocks through massive selloff.)
I know and you probably know by now that I am crazy in a certain way.
I believe that correction is healthy as long as it is supported by fundamentals.
It has been long overdue. It is finally here and you know what? You should happily embrace it.
My major readers here are mostly fall in 30-50 years young and your investing horizon is another 20-40 years. You have many hundreds of monthly paycheques coming to you for further deployment. Would you want to buy stocks at higher prices or lower prices? I have been very struggling to deploy my capitals lately so I am quite happy that the correction is here.
In 2 year or 5 years from now, it would likely recover and reach higher price points anyways so why don’t we embrace buying stocks at cheaper prices now so that you can make higher returns 5 years from today?
I don’t want to my individual stock to drop because of deteriorating fundamentals. I probably would selloff that stock or should not have purchased it at the first place but I love entire market selloff that brings down price of all stocks.
Hyman Minsky, an intelligent American economist said that future problems are born by long periods of calmness. We have been having this 8 or 9+ years of bull markets. It probably is time.
I always wanted my stocks prices to be as aligned as their fundamentals. I don’t want the prices to be ahead because that would attract a bunch of shortterm shareholders that drive up the price so high that make me uncomfortable of remain as a shareholder of companies that I love. I don’t want the prices to stay lower than its fundamentals for too long either. I just want their stock prices to stay about at the fundamentals.
The companies that I own are fundamentally strong and I am not too worried; their balance sheets are amazing, they make tones of cash flows and high portion of their business are owned by owner-operators that are amazing at allocating capitals.
I have always made significantly higher returns immediately after market downturns or corrections ever since I started investing.
That happened in early 2016 and during Brexit.
Stay the course if you own solid companies and think this correction as a buying opportunity.
I am not going to lie. Checking your balance may hurt your feelings especially when your portfolio balance is in many hundreds of thousands. (e.g. if yours is $500,000 then last several days, you would have lost $50,000 or so…) but think about the big picture. You will be better off if you are a long term investor. Pulling out now may be a good idea if you are good at timing the markets but I am pretty bad at it so I would have to stick to it. I already lost 5-6% anyways during last several days of selloff. 🙂
Good luck to all my readers in this opportune time and happy hunting!
You mean buying oppurtunities lol
Possibly yes! 🙂
I think you are jumping the gun a little. This might turn into a correction but 8.5% does not qualify as one until it hits 10%, or so I thought? It has cost me six figures plus so far, on paper so it has definitely corrected my portfolio.
Yes. You are right. I jumped the gun a little. We are getting close though. Let’s see what today’s markets give us. I hope you have stomach to handle six figures plus loss. I am sure you do as you would have seen all by maintaining more than a million of portfolio in many years. Good luck Steve!
I agree with Steve. I think its premature to start buying. For the most part we are back to some December price levels so we’ve lost our 2018 gains. But those gains were abnormal and not really justified by fundamentals, the market was getting even more ahead of itself. So to say this is “THE” correction we’ve been waiting for might be premature since this doesn’t feel big enough. This may be the calm before the storm. To think that this last week’s drop is the worst of it and we are now back on track for a growing market is wishful thinking I believe.
You are completely right Brad. It is premature to pull the triggers. One thing I learned last several years of investing is to wait patiently until things are settled. Today’s another 4-5% down really tells us the story. I am quite amazed by its high % drop without real fundamental headlines (e.g. Brexit) but if you think about it, the markets just lost last 3 months of gain. That’s it. The markets are still 15-20% up for last 1 year period.
you were right besmartrich. Doomsday is upon us. not just a correction.
Haha I am not sure about doomsday is here but more so on buying opportunities is coming closer to us. 🙂