First, you let down your guard.
Then, you become complacent.
And then, disaster strikes.
That’s certainly what it felt like on my Twitter feed this week when growth stocks started wobbling, then plummeting.
The funny thing, of course, is that they didn’t really plummet.
Sure, some got hit harder than others. But in aggregate, as represented by the Nasdaq, tech has only come off 5% or so this week.
Over the past month, the decline was about 1% higher – and that’s before the late-week rally.
So what’s up with all the lamenting going on?
Well, to begin with, we’ve had it damn good for damn long.
In early January, I pondered just how high the stock market could go. At that point in time, the S&P was around 3,700.
At its lowest point this week, the S&P was about 4,050 – and everybody just about freaked out.
That’s right, the same folks who shouted “overpriced” when the S&P was at 2,500 last year, or 3,700 early in 2021 are now either heading for the hills or screaming “buy the dip!”.
Now, let’s be honest with ourselves.
The uptick in inflation to 4.2% could either be a temporary blip, or a sign of structural changes to come.
No one knows which one it will be.
However, what we all do know is that the only way to prosper over the long run is to hold a nicely diversified (i.e. not 100% ARK) portfolio of income-producing assets like stocks and real estate.
Once that portfolio is in place, please do yourself a favour and just let it be.
Sure, check in on it once a month (I prefer quarterly updates). But there is absolutely no need to track it on a daily (or even hourly) basis.
Trust me, both you and your finances will be much better off that way.
Happy weekend everyone – and enjoy the latest edition of Greatest Hits:
From Yours Truly
Casualties Of Your Own Success – Morgan Housel
Is it time for the old guard to step aside? The Reformed Broker introduces the new, unexpected generation of business moguls in Sorry, Not Sorry
Four Investing Lessons From David Swensen – Dollars and Data
What’s At The Bottom Of The Crypto Rabbit Hole – The Escape Artist
Is It Harder For Young People To Get Rich Today? – A Wealth Of Common Sense
The Perfect Career Length – Happily Disengaged
Financial Independence Or Not, Work Will Never Stop – Accidental Fire
Finally, The Indeedably explores a new, highly effective way to FIRE: Perspective
How To Clear Mental Space In Your Brain – Alexandra Franzen
Like him or not, but this is a stellar track record of accomplishments by someone hitting the ripe age of 38.
It also proves what I always preach on this blog: hard work is a pre-requisite, but success is ultimately about social skills:
And to finish it all off, some excellent books to download onto your brand new Kindle.
Empire Of Pain: The Secret History Of The Sackler Dynasty – Patrick Keefe
So Good They Can’t Ignore You – Cal Newport
Shoe Dog: A Memoir By The Creator Of Nike – Phil Knight
Happy weekend all!
P.S: Attention New Bloggers:
if you are a personal finance blogger who hasn’t yet been featured on Greatest Hits, I would like to hear from you.
Please send an email to bankeronfire at gmail dot com with a blog post you would like to submit for consideration.
The key criteria for inclusion are as follows:
(i) Content that will be interesting or beneficial to the readers of this blog (I hope you will forgive me for reserving judgment on this one)
(ii) Your blog must be at least 6 months old, with regular posts. Too many bloggers flame out early, and I don’t want the readers here to follow a bunch of dead links.
I look forward to hearing from you.
Note: the above post may contain affiliate links. You can read up about our affiliate policy here.
About Banker On Fire
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Banker On FIRE is an M&A (mergers and acquisitions) investment banker. I am passionate about capital markets, behavioural economics, financial independence, and living the best life possible.
Find out more about me and this blog here.
If you are new to investing, here is a good place to start.
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