What On Earth Is Going On?

What On Earth Is Going On?

I read and write about the stock market for a living, which means that — 90% of the time — my friends and family couldn’t care less about my job. 

However, every so often, I start to receive a trickle of tentative messages from people that I haven’t heard from in a while asking if I’ve heard of X stock, or what I think of Y as an investment opportunity. And much like Joseph Kennedy getting stock advice off a shoeshine boy (no, I’m not comparing myself to Joseph Kennedy), this tells me that something pretty big is going on. 

This past week or so, there have been some crazy things happening on the market that have not only become a talking point in the financial world but in wider culture too. 

I won’t take this time to go into the intricacies of all of this because I’m sure that you already know if you’re reading this. If you don’t know, just pop on over to Twitter where last week’s epidemiologists have all become financial advisors.

Here at MyWallSt, we’re long-term investors. Part of this requires us to not be reactionary towards events that cause massive volatility. As such, we’ve decided to wait until the dust settles as little before making a comment on the events of this week. 

However, there are some things that long-term investors should remember amidst all this madness:

1. We’re investors, not traders.

Our goal is to find great companies to invest in. When we buy stock, we do so in the belief that this company is well-positioned to grow in the future. We look at things like its leadership, its track record, its roadmap for the future. If it’s not a company that we could see ourselves proudly holding for the next 10-15 years, then it’s not a company for us.

A lot of the talk that’s been going around recently concerns trading, not investing. There are certainly a lot of people who have made a lot of money trading, but it is a different beast to investing. It’s not so much concerned with the fundamentals of the company as it is with the movement of the stock price itself.

Make sure you know the difference between these two things and make sure you act accordingly.

2. FOMO is a killer

We all hate missing out on good things. Personally, I’ve been having FOMO the past few weeks looking at all of the people in Australia and New Zealand out enjoying their lives while we’re still stuck at home thanks to COVID. But I digress…

Feeling like you’re missing out on something better is just part and parcel of being an investor. There’ll always be a hot new stock that’s jumped tenfold in the last year, there’ll always be “the next Netflix” or “the next Apple”. 

Accept the FOMO when it comes, learn to live with it, and just remember — it just takes one well-timed (and well-researched) strike to change your personal fortunes immeasurably. You can’t get them all.

3. Education is key

It might sound trite, but the number one investment you can make in the stock market is actually educating yourself about how it works. It’s hands-down the best way to make sure you don’t lose money, it helps you in your quest to make money, and — best of all — it’s free (**cough, cough** check out our Learn app).

The rise of zero-fee brokerages over the past few years has been a fantastic force in democratizing investing for the masses, but it also means that some people are getting started without sufficient knowledge of how this all works. That’s a recipe for disaster.

If you take the time to educate yourself about investing and how the market works, you’ll have the confidence of knowledge in your corner — an invaluable asset in navigating your way through times of extreme volatility like we are seeing right now. 

Stay safe (and smart) out there folks!

JamesJames

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