Maybe if I were more financially savvy, I’d be alarmed by the collapse of several banks over the weekend. As it stands, I’m mostly just preparing myself to ride out some choppy financial waters in the short term. The markets don’t currently seem to be in a panic, so I’m opting not to be either. After all, if the markets do decide it’s time to panic, it’s mostly too late for me to do anything about it anyway.
Over the last 20-odd years, I like to think my approach to most financial contagion has been to shrug and keep buying every other week. As a young, new investor, I bought into the teeth of the collapse of the dotcom bubble, then through the Great Recession, and most recently through the panicked COVID-19 sell off. Not being a finance guy or an economist, most of what I know comes from history – and that’s that every squirrely period of economic chaos eventually ends. Over a sufficient enough period, every bad time, including the Great Depression, has ended with markets making new highs.
The trick, of course, is simply to hang on and don’t even think about locking in your losses. It’s a trick, because, as they say, the markets can absolutely remain irrational longer than you the individual can remain solvent. Assuming the House of Representatives doesn’t insist on allowing the federal government to default in a few months, I’m not especially worried about staying solvent. If it goes the other way, how well my philosophy holds up gets a bit murkier.
In any case, I’m nowhere near the panic button despite how much the finical news reporters insist on wringing their hands.