Tuesday, August 25, 2015

Ready to Get Down and Dirty

I lost almost half of what I invested in the stock market last 2008. Just this Monday, Aug 24, things seemed to be repeating all over again. This might mean that it is or maybe it is not. No one really knows, though there are indicators that major corrections are about to happen. We have been enjoying bullish movements for the past years and we all know that it's gonna happen sooner or later.

I won't give tips on what to do about it. I'll leave it to those more experienced and seasoned traders. I read them also by the way. But what I just want to do here is to share to you and at the same time remind myself of what I experienced during the last recession. I saw people losing jobs then. Just one snap and they are jobless. Then stock prices were free falling. Foreign and local fundies were selling off and the individual traders were losing hard earned money. Property bubble was the culprit then. Now, they said it's the instability of some economies in Asia (China) and Europe (Greece, etc). Other factors come into play as well. Wars for example.

For the individual traders, it matters less what the cause is. The effect is what hits them directly into their pockets. We may be able to understand all these things and know the steps to do when it happens. But the most important thing I learned in 2008 was that, even if you think you know what to do, it's never that easy.  You know the steps but will never be sure when to execute since the market cycle is only obvious on hindsight and not when you are currently in it. And then there's your emotion. There might be signals on what to do but your feelings will always get in the way.

As important as knowing what to do is to be prepared emotionally, physically and mentally for the grind.  You must toughen up your skills, composure and physical body as much as you can. Your readiness will dictate what your actions will be during crisis.  It will be a long tough battle so being generally healthy is of high importance. Make no mistake about it. It's a war out there.

Complacency and "peacetime" will provide you the moment to equip yourself but it is always during the moment of danger that your maximum potentials will be triggered. Your knowledge will be your ammunition. But if your body is not capable to carry out your game plan, every weapon that you carry will be useless.  Also remember that the experience of how you handle these moments will be the most valuable lessons that you'll bring throughout your investment journey. Everyone of us will go through the same economic cycle bringing in the same fundamental knowledge of it. The differentiator would be nothing else but your self so being healthy is your best advantage.

So everyone, enjoy the ride and hold on to your seats as we go thru this roller coaster ride of stock market and investments.