This is What We Trained For

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This year should look very different to you investors than the past few. In the past few months we’ve seen a couple big dips in the market, and you may be starting to worry. It’s an emotion we haven’t had to deal with for some time. Until recent weeks, there was little fear involved with entering new investments which made things pretty easy. This is the time that will show your true colors.

I firmly believe in my Buy Smart Never Sell mantra. If you are investing regularly and intelligently through this year, you will do better in the long run than if you panic even the slightest. Am I predicting a crash? No. Am I predicting a rebound? No. I am predicting that nobody knows what the future holds. If you’re making speculative trades that you hope to make 10-20% gains within a year, this is the wrong blog for you anyways!

Here’s why I believe you should stop worrying and continue your strategy, you will win in every scenario that you don’t sell.

Scenario 1: The market rebounds, by not selling you haven’t lost a single thing, and probably made more money, huzzah!

Scenario 2: Bear Market, by not selling, you don’t realize any losses, your dividends are reinvested at a discount speeding up the compounding process, you continue to buy great companies at a discount as well. Maybe it takes a year or 2, but the market WILL eventually come back to where it was and you’ve made even more money by continuing to invest and reinvest.

Scenario 3: It’s just choppy for a year with no major gains or losses, you pick up deals where you can, and presumable this will be followed by scenario 1 or 2.

Scenario 4: Armageddon. All money becomes worthless and you’re no better or worse off than anyone else because society is collapsing and your new worry is finding beans and gathering weapons to fight zombies. Haven’t you always wanted to fight zombies?

The media gets its jollies by preying on your fears, but the truth is you have nothing to fear if you stick to your strategy (except maybe the zombies, especially if they’re the fast kind).

This isn’t to say you won’t get stressed out seeing your portfolio drop double digit percentages. It will be hard to stay strong and do the right thing, but if you do, you’ll be rewarded.

Stay strong investors!

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