Black Monday

I had missed a few days of blogging as I was celebrating my birthday weekend with friends and had planned to finish a longer post on Sunday. Unfortunately, the news of the impending market crash started to trickle in and it was hard to get in the right mindset.

I decided to write about today’s events instead as some personal therapy.

Today marked the worst one-day drop in the market since the financial crisis. The circuit breakers kicked in for the first time in 20 years halting all trading activity for 15 minutes due to a 7% drop in the S&P 500.

The crash can be attributed to the growing spread of the coronavirus coupled with a very timely crude oil war. There’s no hiding it now and the panic has started to become real panic.

I want to say I’m immune to the emotion and that my willpower is strong, but this greatly affected my day today. This is the first major crash of my young investing life. I was 18 during the 2008 financial crisis and barely old enough to really understand the impact. This one hits differently.

My way of coping has been to read and learn as much as I can from some of my favorite investors. That has helped quite a bit, but it is not a cure.

The only cure is to ride this one out and wait for the markets to turn and stick to my plan.

One of my favorite reads was on a post by Ben Carlson today on his blog. My favorite quote:

“These are the days when you don’t need financial advice, you need a psychologist. This is why managing people is always more important than managing investments when you work in the financial services industry. Anyone can build a portfolio. Not everyone can stick to a plan.”

I have not overreacted to this market. Out of my friends, I am one of the few calm and rationale ones that hasn’t sold off everything. I am not sure if this is the best plan, but I am ready to stick to my guns.

Today was an emotional rollercoaster. There will be more days like it, but my worth as an investor will be determined by days like today.