Many investors are afraid both when the market goes up and down. Markets are rarely in equilibrium. Moving up and down is its very nature. During bear markets, media hype creates enough scare for people to exit investments. In bull markets, as markets keep making fresh highs, there is a strong fear of fall again hyped by the same media.
Markets do not follow any rules. Each market situation is unique. Every bull and bear markets occurs on different triggers. Over valuation or under valuation can last for long periods of time too. Our investment philosophy is not to time the market. We would go through periods of high returns, low returns, no returns and negative returns. We need to go through all these to get good long term returns.
In terms of years, markets are usually up 70% of time and down remaining 30%. There is no proven method or strategy to only capture good years. You need to go through bad years to get the reward of good years.
Also a 10% correction happens normally once a year. A 20% fall occurs once in few years. During a decade, we may even face a 30% fall too. These are only averages over a long period of time. Actual occurrences may significantly vary. Nobody has consistently timed all these profitably. Neither we nor anyone else can predict short term. Like seasons, long term is more predictable. Like weather, short term is unpredictable.
Because of my profession and interest, I read many good things and some nonsensical ones too, just to get a feel of what is happening around. You’ve no such requirements or compulsions. All of you have full time occupation. The best way to avoid noise is to completely shut it out.
Ignore any ups and downs. Just stay the course. Avoid or minimise use of online portfolio access. Our yearly review is more than enough.
Keep in mind that good periods are more than bad ones. It is easy to remember it now in a bull market. A 10% correction or 20% fall may always be around the corner. Don’t forget to remember it then.