Temptation and Emotion

Wow, what a few weeks for an investor! I am tempted to say, what a disastrous few weeks, but that would be unfair to all the smart investing advice I have been given through books and other reading material. Then again, I cannot even say what exiting few weeks, since all these corrections and buying opportunities cannot give any normal investor any confidence about what to do right away.

So I will just write about what my own thoughts are regarding all this. To begin with, I am pretty sure if I had money to invest right now, I would have bought something missing from my highly unbalanced portfolio. However, as is the habit, even though I have nothing to gain/lose from that action, every morning I check how the market is doing and how my portfolio is holding up. Now, I have no intention of doing anything in a time like this that involves selling or panicking, I am after all a mere mortal. And sadness and disappointment does lead to a very strong temptation to "do something".

The idea of course is to resist the temptation to do anything. I know that, and so does probably anybody who has had made an effort to learn all the basis of common sense investing. I can give out all sorts of charts showing you how not selling, sticking to the long-term investing strategy in a market like this works out way more beneficial for an individual investor as compared with somebody who does such "crazy" things, but then I would not be able to call myself a "lazy investor". So, just believe me or pick up any decent investing book.

I guess what I am saying is that even after knowing what the right things to do are, investing, money, personal finance, the stock market, etc have a very strong human element to it. We are all emotional human beings and panic, disappointment, excitement and most importantly temptation are factors that no book or knowledge or advice can teach you. That unfortunately has to be handled individually.

As for me, I generally deal with days like these by a few minutes of silent cursing followed by some sulking, a brief moment of panic and then moving on with life......