Interestingly, when markets panic and the selling does not stop, none of us will feel alright. The norm is for investors to feel trapped in their overwhelming negative emotions. So, what can we do at those points of our life? The Dalai Lama explained that negative emotion stems from self-centredness as well as us believing in the illusion that is the reality that is right before us. Needless to say but that is hard to understand at first but after a while it does make some sense even for investors. Today we are going to try and find ways to navigate through those tough periods of our lives so that we can still function as normally as possible.
Ask yourself if there are any objective steps to take that is not out of impulse
I wish I had a more elegant way to say this but basically, try and prevent ourselves from becoming petrified by the market situation. Guilty as charged, I have had multiple episodes of such paralysis over the years. Even recently, I found myself losing confidence in myself and my strategies because the market reached a point where there seems to be no light at the end of the tunnel. Still, I believe that if we looked at the situation objectively, then we will be able to make objective steps even in the midst of a crisis. These moves made are undoubtedly risky but it can also be one of the most legitimate moves that you could have made. For example a profitable company continue to face selling pressure, I think in those circumstances, we have to be objective and purchase more of those stocks instead of shunting from it.
Stop looking at the share price and thinking that your money is gone
The problem that we all face in the market is that the market price is the only price at which we can buy or sell a particular stock. Meaning, we can never negotiate with the market whereas we can only wait for price to somehow match our targets. If the price does not match, then the trade will never be fulfilled. Therefore, if we are only able to sell at an undesirable price then we feel that the value of the stock is indeed stuck at the present last trade price. While that make sense, it is never the true value of the stock especially when the market is heading south because of how the media is positioning the company or market. So, before we imagine that our money is gone for good, stay objective and stick to the plan.
Stop focusing on yourself especially during bad times
One big lesson that I have learned during the recent market fallout is that investors should not whine too much about our situation especially when we are not facing any financial difficulties. Regardless of whether you have lost how much money, be tactful when you communicate with others who are in the midst of some financial hardship. If you want to be truly objective, then do not contradict yourselves by making your losses sound like a big deal. Count yourselves lucky to be your position where you can afford to lose. That is probably a weird thing to say even as a blogger but I think it does makes sense that we are in a somewhat privileged position.
Closing Thought
Having negative emotions are part and parcel of being a investor. If you are unwilling to go through such experiences, then you are probably not able to last very long in this journey as an investor. However, if you are determined to stay as an investor for the rest of your life then be prepared to face situations that is far worse than you would hope to be in. So let’s hope that you get what you ”wished” for if you really want to be an investor.
