At last, ladies and gentlemen, the day I have been waiting for the last six months has come upon us.
The stock market has crashed. The bubble has finally burst, and you know what? I hope it keeps going!
Now, I know what you might be thinking – who in their right mind would look forward to a market crash?
Well, me. Oh, also and Warren Buffet!
“Widespread fear is your friend as an investor, because it serves up bargain purchases.”
–Warren Buffet, billionaire investor
Right now, I believe the bull has well and truly exited the building.
I mean, things were doing so good for so long. I remember buying my first stocks last year with Vanguard, and four months later they were already up by way more than I would have ever imagined. My shares were performing very well and I was one happy rookie.
This was also around the type that the crypto hype hit, where everyone was preaching Bitcoin left and right. Our friends were constantly talking about how much their cryptocurrency had gone up lately and saying how we were missing out by not investing. Even my own mother asked me if she should buy crypto!
It seemed like anywhere I looked online, Bitcoin was the newest investment trend.
That’s when I started getting a little bit skeptical. I mean, don’t get me wrong, this girl loves a good return, but this was kind of past the bliss point. The returns people were making off crypto were out of this world, and the share market wasn’t that far behind.
But, as we all know, what comes up must come down. And boy, did the market come down.
First, it was Bitcoin. Compared to last month, experts estimate Bitcoin is down by almost 65%. Ouch.
I know it seems like I may be bashing cryptocurrencies in this post, but that’s not what I’m trying to do. I was always very skeptical about Bitcoin and cryptocurrencies in general for various reasons. There is a great post written by Tanja at Our Next Life about Bitcoin, which pretty much sums up my views on Bitcoin. I highly recommend you check it out here.
Finally, after Bitcoin came the stock market crash. It is currently estimated that almost $4 trillion have been wiped from the global markets this week. Double ouch!
In the last few days, my net worth has been wiped off by almost 20%.
At first yes, I’ll admit, it was a hard pill to swallow. Nobody wants to lose that much money in that little time, especially when the majority of it are your life savings. But I’m not in the slightest bit worried! Why?
Because my favourite holding period is forever.
In other words, I see investing as a long-term commitment, kind of like a marriage. When I buy an asset, such as an individual stock, it is literally until death do us apart. Well, not really death, more like retirement, but you get my point.
I never put my money in something I wouldn’t be happy to hold for at last 10 years or more.
I don’t trade to make a profit. I don’t have a spare $15 to spend on trading fees every time the market moves.
I don’t try to beat the market.
Neither should you. Even Warren Buffet shares this belief.
You see, I am an optimist.
I try to look at things from the bright side. I have been through plenty of dark times in my life to know that this too shall pass. Bad times have an expiration date, and so will this market crash.
Eventually, I believe the stock market will bounce back. Prices will again rise, and growth will get back on the positive side.
Right now, it seems like everyone is panicking, trading left and right. There’s literally people advocating that you sell right now because the world is about to end.
From my point of view, that is literally the worst thing you could do. By selling your stocks now, at an extremely discounted price, you are taking away the chance that the will bounce back in the future. Sure, nobody can promise stock market will ever return to the record high prices seen in January. Then again, nobody says they won’t!
Assuming that we all don’t get gunned down by Terminators tomorrow, the world is probably going to be okay, and this includes the market as well!
As I mentioned before, I am the type of investor who has a long-term focus. To me, it doesn’t really make that much of a difference if the market crashes a few times until I retire. As far I see it, this is just another bump in the road. Even better, this could also be viewed as an opportunity.
I am the type of girl that loves a good sale and discount. Right now, I believe the share market is having a sale!
From a long-term investment perspective, now is one of the best times to invest in the stock market, because everyone is selling their stocks left and right at very attractive prices. Once my partner and I raise enough money, you bet that we will be investing some more this month!
I know that this is an odd strategy, so I’m going to let the expert convince you of my logic behind this one.
If you’ve been following my blog for a while, you know that I base my investment strategy on William Bernstein’s perspective, as outlined in his book “If You Can: How Millennials Can Get Rich Slowly”. This is a book I highly recommend anyone read, even if you are not a millennial. There’s some really good advice in there and principles that make for solid investing decision. If you want to grab a copy, you can pick up an eBook version here* for less than $1.
In addition, if you want to know more about investing or just money in general, check out our resources page. There’s a lot of personal finance goodies on there!
Lastly, I’ll end this post with two books I believe you should be reading right now and why. I recommend you read these as a pair, as they both hold very different views.
The first one is called “Devil Take the Hindmost” by Edward Chancellor and you can pick up a copy here*. It is all about how the life of the investor looks like during the bull market, when everything is peachy.
The second one is called “The Great Depression: A Diary” by Benjamin Roth, and you can get it here*. It paints a portrait of how the investor’s life looks like at the bottom, when the bear market is on and things are looking bleak and stormy, kind of like now.
What both those books teach you is the ability to tell one extreme from the other; the bull and the bear, their effects on the market and how the majority of people react to them. Above all, the teach you how to go against ‘mob mentality’ and see the opportunity where others may not.
I know this is a long post and I hope you stayed with my all the way to the end. This is a subject that I am truly passionate about. I hope you have gotten some value out of this post today and that it maybe given you some food for thought. If anything, I hope it has provided a bit of clam among the sea of worry that’s flooding social media right now.
As usual, I want to know more about you. How are your feelings about the market right now? Are you hopeful, scared, in the middle?
Let me know in the comments below!
Being broke is temporary. Being rich is a journey.
*Includes affiliate links, meaning that if you do make a purchase, this blog would get a small percentage of the sale at no extra cost to you.
** DISCLAIMER: All the posts on this blog are for informational purposes only and should not be treated as qualified advice. The advice on this blog does not qualify as substitute for obtaining professional financial and legal advice, so please contact a qualified professional before applying any of the information given on the blog to your own situation.