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Red Days Are a Gift To The Confident Investor
Today, the market is down for the second day in a row. Tech, in particular, has been hit hard. We’re seeing June prices in August.
Investors have three options when the market is red: Sell during the panic and pessimism, ignore the drop and stay the course, or buy the dip.
Anyone can be an investor on a green day. Optimism is up. I check my portfolio twenty times throughout the day and count my wins. If it’s good enough, maybe I take a profit. I congratulate myself for my own financial cunning.
Green days are fun. But the problem with green days is that they tell you nothing about your potential as an investor.
What matters more to me is this: How do I behave when the headlines are bad and the market is wholly red?
If my intuition tells me to sell, bail, cut my losses — then it’s a sign I don’t trust my due diligence.
If my intuition tells me to buy the discount, uncover opportunities on my watchlist, or scramble for quick cash to invest — then that tells me I believe my own theses. It’s evidence that I trust my research more than I believe today’s market pessimism.
Will the market be down again on Monday, or all next week, or maybe the next three months? Who knows.
