Don't Panic because the Stock Market is
If you haven't been watching the stock market these past few weeks, you may have not noticed that the market has dropped for seven straight weeks, which apparently is the longest weekly losing streak since 1923. It did end the week of May 23 positive, ending that losing streak. The war in Ukraine, supply chain crunch, and inflation take most of the blame. Taking a deep breath and looking at historical charts will help prevent you from panic-trading on emotion. Controlling your emotions is probably the most challenging thing about investing discipline. Overreacting is very easy to do when everything is on fire, and all media coverage says it's the end of the world.
I would agree that the below chart of the S&P 500 for the past 6 months is an alarming trend. We are investing to make money, not to lose it.
But when we zoom out more to the 5-year chart below, the recent S&P 500 pull back doesn't seem so bad. Long-term investing - especially if you're buying something like an S&P 500 index fund - usually wins out. So don't panic! Stocks and funds you bought a few years ago are probably worth more now than before, even with 7 straight weeks of declining market performance. For us younger generations, now is a fine time to contribute to your Roth IRAs, 401ks, or just buy some cheap(er) stocks or funds. As John Templeton has said, "Invest at the point of maximum pessimism."
By popular demand, next month, we're going to jump into credit and credit cards. Your credit score and creditworthiness are insanely important in American life. Like, way more than they actually should be.
It's getting toasty outside, so jump in the pool when you can!
- No trades this month.
- Lindsay, Chloe, Antonio, and Garrett are still sitting on the additional $1000 in cash.
Please remember to update the google sheet detail tab when you buy/sell something. I look at the revision history each month so I can include your trade in this newsletter. The summary tab is at the bottom of this email as a picture and the live link to it is here.