The stock market’s crazy bull run came to a halt with a bunch of inefficiencies and now everyone seems to have lost their minds.
Many traders who banked off the bull run aren’t able to adapt to the volatility in the stock market. Many of the stocks like Gamestop (GME) and Churchill Capital (CCIV) sparked instant gratification for many.
The truth is, the market isn’t always like this. I’ve been in the markets since 2017 and I’m seeing a bunch of new retail investors (like myself) panic selling in the Facebook communities I run.
There’s about 50% of members who aren’t worried about the dips and buy them up. There’s another 50% of members who panic, ask for advice and sell their investments for a loss.
All your hard-earned money is now the market’s money.
It’s disappointing to see investors sell at a loss, especially because they’re actually in a fairly decent position. If their stock takes a $5 dip they think it’s going to crash.
That’s not always the case. It’s important to play the long-term game because there’s far less stress involved and far more upside to holding for 5+ years.
The people who bought bitcoin at $500 saw it spike up to $10,000 and watched it fall all the way back down to $5,000.
Did they sell? Yeah, some of them probably did.
But the smart investors held on tight and focused on other things and passively made bank. Bitcoin is projected to reach $100,000 within 2021.
The point is that instant gratification is something many of us have grown accustomed to especially during the Pandemic. There isn’t a whole lot of excitement when life is somewhat restricted.
We want to see the money in our bank accounts 10x within the month and we want it now. If we see our money go down, we panic. We’re not ready to lose it all.
Stocks bottom out and then come right back up again. It’s that simple. Panicking in the short term and letting your emotions get to you is an easy way to get humbled by the markets.
To any of the impatient, greedy investors out there who are considering selling their long-term positions, I advise you to look the other way.
Assuming you didn’t pick a company like Nikola that has fraudulent activity, and actually isn't as they advertised, you have nothing to worry about.
To be an investor in the stock market, you’ve gotta be able to ride the waves — all of them. It’s going to be rocky at times, but others are going to have you feeling like you’re going to the moon and that investing is so easy (trust me I’ve been there).
If you’re on the cusp of panic selling, just buy more at the discounted price.
If that doesn’t work, just go back to living your own life without letting money take over. Set it and forget it. Patience = Pay-tience. Rinse and repeat.