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In my email yesterday I mentioned that given we are in a range and just coming off a pretty serious volatility event, it just feels like any little jitters could send the markets in a stronger direction.  Checking the time stamp of the email it was literally within 90 seconds after sending it that the markets went tumbling.  Do I have that kind of power of persuasion I wonder…

In my opinion it’s important to remain focused and ready to follow any trends that emerge in the markets because of course nobody knows when the next recession will finally come.  But at the same time staying nimble and being willing to move to safety positions can really smooth out the experience.

We’ve not experienced nearly the chop and up and down action that the stock market has thus far.  It’s not possible to avoid the one or two day surprises that come out of nowhere like yesterday, but it’s certainly possible to mitigate the damage by just moving to safety and waiting for better entry points.

Markets are down a few percent this year, but more than just the financial loss is the emotional roller coaster of such sustained ugliness.  Avoiding as much of that as possible really is one of the keys to long-term investing success.

Preserving emotional capital

So we’ll move to safety here and just patiently await some better entry points.  After the move yesterday we are right back to that 200 day moving average and I think this time it feels about 50/50.  Maybe we bounce again and go higher, but I could also definitely see the bottom falling out and the S&P going lower. 

 

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