Slow and Steady Wins the Race

The last quarter of 2018 was brutal for investors. Trade wars, interest rate hikes, a glut of oil reserves; among other variables; all conspired to  a depressed stock market. After a record bull run many pundits were calling for a bear market to take hold. Two weeks into the new year nothing has really happened except that the market has appeared to stabilize. (Technically the government is shutdown but this has not affected the market yet.)

What does this mean?

In my opinion we just saw an end of year market correction. Already my portfolio has been making slow incremental increases. Furthermore I’ve been buying while prices are well below their 52 week highs.

How I am getting through a market downturn:

  • Dollar Cost Averaging (DCA) I kept making weekly deposits into M1 Finance and Acorns where my money was being auto-invested. My cost basis for all my holdings are now lower creating opportunity for larger returns.
  • I reviewed all the companies I had a stake in. I made sure they are still aligned with my investing strategy and philosophy. I had mentioned it before but I finally dumped a company that I was not happy with. I took the loss but reinvested the money in a much stronger company.
  • Ride it out. Historically every downturn has upswing. Charting the DOW and S&P 500 indexes will show that in any period a dip is followed by slow and steady gains generally surpassing previous highs.

While my optimism that we avoided a bear market may be wrong I do know that investing consistently over time will set me up for future wealth.

Advertisements

2 thoughts on “Slow and Steady Wins the Race

Add yours

  1. Yes. You are right. Things are looking brighter and volatility is finally starting to recede some, but still lingering on a little and nowhere near the volatility lows of October. We’ll see where we go from here, but I think the days of record settings volatility lows are behind us. Only time will tell.

    Like

    1. It’s purely speculative but I think once the government shutdown is resolved and a trade deal with China is signed we will start seeing stocks start to rebound.

      Like

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

Create a website or blog at WordPress.com

Up ↑

%d bloggers like this: