A single moment can be powerful.
It can be powerful enough to change your life forever.
It happened to me… fortunately for the better.
In my 20s I was working for a financial publishing company in Washington, D.C. Our offices overlooked the White House and the heart of the political capital of the world.
I specialized in crude oil, natural gas, liquefied natural gas (LNG) and a host of other commodities. I built price and trend reports for the trading hubs.
For years, the markets were booming. But they suddenly – and abruptly – took a turn for the worse.
A lot of people were scared.
I was scared.
I asked my boss at the time, “Should we tell our people to sell? Should we move to the sidelines?”
What he said to me next changed the way I thought about markets and about volatility. And it changed my life completely.
He walked over to my desk and told me, “Pull up an all-time chart of the S&P 500.”
I did.
He told me, “Find the Great Depression…. Find Black Monday… Find Black Tuesday… Find any of the darkest days in the market history. Point to me the 1973 oil crisis… Here’s the secret: They’re just blips.”
It seems obvious now. It seems undeniable when you look at the multi-decade returns of the index. But in that moment, when chaos swirled around us and it felt like the world was ending, I discovered what at the time appeared revolutionary.
Yes, there may be down days, down weeks, down months, and even down years. But ultimately, the market only moves in one direction: Up.
Most importantly, I realized if I remember that when everyone else doesn’t… when everyone else is overwhelmed by panic and indecision… that’s my advantage.
For the last two decades, that’s been my mantra and guiding philosophy.
Don’t panic.
It has made more of an impact on my life than anything else.
It’s brought me calm in even the fiercest of storms.
The darkest days in the market are some of my happiest.
If the stock market crashes, I have trailing stops to make sure my losses aren’t unacceptable. That my risk is capped.
And even better, any losses I suffer I’ll make back several times over. Because I’m out buying, picking up shares for a steal, while everyone else is fleeing to the sidelines.
I understand that when the market returns to its only true direction – Up – I’ll be the one celebrating.
Better to Be Prepared than Sorry
My sense of ease during periods of uncertainty isn’t only driven by optimism, decades of experience, and understanding the market’s one true direction…
It’s driven by practical practices.
I employ a smart, time-tested investing approach. I know it’s better to be prepared than sorry.
I use trailing stops which prevent a manageable loss from becoming one that threatens our future.
I use asset allocation, ensuring no single position accounts for an outsized, dangerous portion of our portfolios.
And I ensure my portfolios are diversified, consisting of a mix of assets. That way, even during market selloffs or pullbacks, I have some positions that are rising.
These have been the pillars of my long-term success. And the reason I’ve been able to help investors for decades, even through some of history’s darkest days.
It also ensures I sleep soundly at night while so many investors toss and turn, burdened by anxiety and uncertainty. I know my portfolios and my future financial independence are protected.
If you’re worried about the next market dip, downturn or sell-off, then you might want to check the safety measures you have in place. Investing is about building for the life you want to lead, not spending every day worrying about your investments.
Never running to all cash,
Matthew Carr
Follow Matthew Today – https://matthewcarr.substack.com/about
