This website collects cookies to deliver better user experience. Cookie Policy
Accept
Sign In
The Wall Street Publication
  • Home
  • Trending
  • U.S
  • World
  • Politics
  • Business
    • Business
    • Economy
    • Real Estate
    • Markets
    • Personal Finance
  • Tech
  • Lifestyle
    • Lifestyle
    • Style
    • Arts
  • Health
  • Sports
  • Entertainment
Reading: Why You Should Sit Out the Mayhem
Share
The Wall Street PublicationThe Wall Street Publication
Font ResizerAa
Search
  • Home
  • Trending
  • U.S
  • World
  • Politics
  • Business
    • Business
    • Economy
    • Real Estate
    • Markets
    • Personal Finance
  • Tech
  • Lifestyle
    • Lifestyle
    • Style
    • Arts
  • Health
  • Sports
  • Entertainment
Have an existing account? Sign In
Follow US
© 2024 The Wall Street Publication. All Rights Reserved.
The Wall Street Publication > Blog > Markets > Why You Should Sit Out the Mayhem
Markets

Why You Should Sit Out the Mayhem

Editorial Board Published January 25, 2022
Share
Why You Should Sit Out the Mayhem
SHARE

It isn’t investments that get tested in turbulent markets; it’s investors.

In midday trading on Monday, the Dow Jones Industrial Average sank more than 1,100 points and the Nasdaq Composite Index crumbled nearly 5%. They recovered to close slightly up for the day, then sank again early Tuesday before clambering back. The Nasdaq Composite Index is down roughly 12% so far this year.

These steep drops came after almost two years of a nearly relentless rise in prices—even for many stocks that professional investors regarded as garbage. After such widespread gains, small declines loom larger than they do when losses occur with more-typical frequency.

Above all, what matters isn’t what the market does—but what you do in response.

As I wrote in 2014:

Individual investors should tune out the futile efforts by commentators and strategists to extrapolate the market’s latest swings into a prediction of what will happen next. Instead, use the recent volatility to make an honest reassessment of what kind of investor you are and how much risk you can stomach….


Newsletter Sign-up

The Intelligent Investor

Jason Zweig writes about investment strategy and how to think about money.


If you have been glued to financial television or websites, fixated on the sight of falling arrows and reddening charts, then this year’s short-term turbulence already has told you something about yourself that has enormous long-term importance: You probably have too much in stocks.

That is especially true if you retreated in early 2020; the best guide to how you will behave in the next crash is how you acted in the last one. If you can’t take the pain, you should feel no shame about staying on—or moving to—the sidelines.

Whether you cut back on stocks or not, the more frequently you check how your portfolio is doing, the more volatile it will feel. Try turning off your phone, putting it in another room, taking trading apps off your home screen—anything to form positive habits and improve your investing hygiene.

On the other hand, if you can control it, fear is “the best fertilizer for future bull markets,” as I wrote in 2011.

Market panics are the indispensable hygiene of markets, the natural way overvalued assets come back into line, making future returns more attractive.

Every investor should be thankful that stocks do go down, for two reasons.

First, if stocks always went up, they would be riskless—and their returns would end up being paltry. The short-term pain of loss is the price we pay for the potential for meaningful long-term gain.

Second, if you have plenty of cash and courage to withstand further declines, other people’s fear could be your cue to act. As I wrote in 2009: “It is sometimes said that to be an intelligent investor, you must be unemotional. That isn’t true; instead, you should be inversely emotional.”

That means market declines don’t have to be a cause of consternation. They can be an opportunity.

The U.S. dollar last year saw its largest increase in value since 2015. That’s good for many American consumers, but it could also put a dent in stocks and the U.S. economy. WSJ’s Dion Rabouin explains. Photo illustration: Sebastian Vega/WSJ

Write to Jason Zweig at [email protected]

More From The Intelligent Investor

Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8

Appeared in the January 26, 2022, print edition as ‘You Should Sit Out the Mayhem As Turbulent Markets Present Test.’

Contents
Newsletter Sign-upThe Intelligent InvestorMore From The Intelligent Investor
TAGGED:MarketsPAIDWall Street Publication
Share This Article
Twitter Email Copy Link Print
Previous Article Rapidly eroding support among Democrats driving Biden approval ratings to new lows: Poll Rapidly eroding support among Democrats driving Biden approval ratings to new lows: Poll
Next Article Imports Drop at Southern California Ports as Ship Backup Grows Imports Drop at Southern California Ports as Ship Backup Grows

Editor's Pick

California dwelling of lacking child’s mother and father searched; father has served time for youngster cruelty

California dwelling of lacking child’s mother and father searched; father has served time for youngster cruelty

San Bernardino County sheriff’s investigators on Sunday, Aug. 17, searched the house of the mother and father of the infant…

By Editorial Board 9 Min Read
Farmer Needs a Spouse: John Sansone and Claire Dinette Break up!
Farmer Needs a Spouse: John Sansone and Claire Dinette Break up!

Studying Time: 2 minutes It's sadly over for one more actuality tv…

4 Min Read
Steak ‘n Shake slams Cracker Barrel CEO for eliminating ‘old-timer’ from emblem: ‘We take delight in our historical past’
Steak ‘n Shake slams Cracker Barrel CEO for eliminating ‘old-timer’ from emblem: ‘We take delight in our historical past’

FOX Enterprise’ Jeff Flock experiences on Cracker Barrel unveiling a brand new…

4 Min Read

Oponion

Amid inventory selloffs, do not panic say specialists

Amid inventory selloffs, do not panic say specialists

Former Leuthold Group chief funding strategist Jim Paulsen discusses how…

April 8, 2025

8 Finest Shampoos for a Bald Head – Males’s Wholesome Scalp 2024 | Fashion

FYI After continued analysis, we discovered…

October 6, 2024

Verizon provides new companions Singtel, Skylo to worldwide IoT platform

What it's essential to know: Singtel…

March 5, 2025

Conservative groups urge Supreme Court to strike Biden’s COVID-19 mandate

Conservative groups on Thursday teed up…

January 6, 2022

10 years of hassle, terror, and tussling due to Trump

We’re sorry to remind you of…

June 16, 2025

You Might Also Like

Trump’s 401(ok) enlargement fuels ethereum growth
Markets

Trump’s 401(ok) enlargement fuels ethereum growth

FOX Enterprise' Gerri Willis has the main points on the funding technique on 'Varney & Co.' Practically $4 billion of…

4 Min Read
Steak ‘n Shake slams Cracker Barrel CEO for eliminating ‘old-timer’ from emblem: ‘We take delight in our historical past’
Markets

Cracker Barrel inventory plunges amid model makeover backlash

FOX Enterprise’ Jeff Flock reviews on Cracker Barrel unveiling a brand new brand as a part of a broader model…

3 Min Read
Intel will get  billion from Softbank as White Home mulls stake
Markets

Intel will get $2 billion from Softbank as White Home mulls stake

Former Chrysler and Dwelling Depot CEO Bob Nardelli praises President Donald Trump’s daring financial play because the White Home eyes…

5 Min Read
Intel will get  billion from Softbank as White Home mulls stake
Markets

White Home mulls 10% stake in Intel after CEO assembly

Former Chrysler and Dwelling Depot CEO Bob Nardelli praises President Donald Trump’s daring financial play because the White Home eyes…

4 Min Read
The Wall Street Publication

About Us

The Wall Street Publication, a distinguished part of the Enspirers News Group, stands as a beacon of excellence in journalism. Committed to delivering unfiltered global news, we pride ourselves on our trusted coverage of Politics, Business, Technology, and more.

Company

  • About Us
  • Newsroom Policies & Standards
  • Diversity & Inclusion
  • Careers
  • Media & Community Relations
  • WP Creative Group
  • Accessibility Statement

Contact

  • Contact Us
  • Contact Customer Care
  • Advertise
  • Licensing & Syndication
  • Request a Correction
  • Contact the Newsroom
  • Send a News Tip
  • Report a Vulnerability

Term of Use

  • Digital Products Terms of Sale
  • Terms of Service
  • Privacy Policy
  • Cookie Settings
  • Submissions & Discussion Policy
  • RSS Terms of Service
  • Ad Choices

© 2024 The Wall Street Publication. All Rights Reserved.

Welcome Back!

Sign in to your account

Lost your password?