10 Stupid Things We Say To Ease The Pain of a Market Meltdown

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The market was down last week, as I’m sure you all well know. My portfolio dropped about $25,000. It’s times like these that I reflect on the many stupid things I’ve told myself in the past to lift my spirits during a market meltdown. Mind you, many of these things are true, but are they really that comforting? The fact is, it hurts when the market drops, and we shouldn’t pretend that it doesn’t. Here are 10 stupid things I’ve told myself in an effort to numb the pain:

  1. I’m a long term investor: True, but I’m still a long term investor who’s portfolio just dropped like a rock.
  2. A market decline is a buying opportunity: Then why isn’t anybody buying? Besides, the cash I have to invest is already in the market and nearing terminal velocity.
  3. Price is what you pay, value is what you get: Once again, very true. But when you go to sell, I’m pretty sure what you get is price, not value.
  4. The market always turns around: Historically true, but what the future holds, nobody knows. Besides, isn’t the more important question, when will it turn around?
  5. Dividend yields are going up: Since dividend yields are calculated by dividing the dividends per share by the price per share, this is mathematically true. Unfortunately, the actual dividends stay the same. I wonder if I can use yields instead of cash to fund retirement?
  6. Dollar cost averaging, baby, dollar cost averaging: I love the fact that we label everything. If you’re wondering what dollar cost averaging is, just think of making contributions to your 401(k) every paycheck–that’s dollar cost averaging. So yes, on Tuesday when I get paid, I can add more money to the market. I know it’s better to buy shares at lower prices, it’s just not as much fun.
  7. The market needed a correction: No it didn’t. In fact, let’s all agree right here and now that the market will never correct itself again.
  8. Buy low and sell high: Brilliant! Why didn’t I think of that? Can somebody out there let me know when the market is low and when it is high?
  9. The market is just taking profits: I’m not taking any profits. Remember, I’m a long term investor. Do you think the ones taking profits are the same folks telling us how important it is to be a long term investor?
  10. There’s always tomorrow: The market opens in a couple of hours, and I’m sure it will take off like a rocket. I just hope the rocket is pointing up.
Published or Updated: March 8, 2014
About Rob Berger

Rob founded the Dough Roller in 2007. A litigation attorney in the securities industry, he lives in Northern Virginia with his wife, their two teenagers, and the family mascot, a shih tzu named Sophie.

Comments

  1. “The market is still higher than it was in late 1929.” I like your list. I am working on a “housing myths” housing series that similarly covers how people try to convince themselves in that market, and your #5 reminded me of my recent article on NOI v. leveraged ROI. Aren’t people interesting?

  2. Ralph Parker says:

    Don’t forget “Oh well, it’s only money!”.

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