Hey everyone, it’s Finance Fridays again. Today we’re just going to briefly go over the “Stock Market Crash?”

Stock Market Crash?

If you’ve been paying attention to the news at all, you’ll see the Market is undergoing a “correction”. Or if you want to be a little sensationalist, you may even call it a “crash”.

To be honest, I don’t really pay attention to this stuff. The only reason I’m bringing it up now is because I have an anecdote to add.

Just a few weeks ago, a colleague of mine was talking about how the Stock Market is at all time highs. Apparently his portfolio was up something like 30%. He even mentioned that people are thinking they should have even better returns and were shifting more money into stocks.

Hearing things like this makes me even more wary to:

Not do anything.

What do you mean?

I have my plan and I’m sticking to it. I’ve pretty much spelled it out for all to see. The basic gist of it are in these two articles:

The 20 Year Career
My Portfolio

Just remember, “better is the enemy of good”. You can’t predict the stock market. Any moves you make, there are many, many people that already have their own things in motion.

In a sea of sharks, you’re more likely to be a minnow than a whale.

How do you deal with these ups and downs?

Like I’ve said before, whether the stock market is up or down today, doesn’t mean anything to me. I just care about how much money I’ll have at the end, which is looking to be around 2040 or 2041 so.

I have my plan for how much money I’d like to have in retirement by that time. Most likely, I’ll probably still be working, but may go part time. Depending on how much money I have available, that will dictate whether I stay full time a few more years, go part-time, or go ahead and retire.

Here’s an example to illustrate my point:

Let’s say you’re watching your favorite sport – we’ll just baseball as an example. It’s the World Series, the Dodgers are playing the Yankees. The Dodgers beat the Yankees in Game 7 to take the series 4-3. The Dodgers are the World Champions. That’s the end.

However, we need to go back to the beginning. This all started with the very first game of the season, Opening Day. However, there were 161 other games in the regular season after that first game. Then there was the NLDS and NLCS before the World Series.

Games were won and lost. Each of those games had their own ups and downs. There were home runs and strike outs. Exhilarating wins and heart-breaking losses. However, all that matters is where they were at the end:

World Series Champions

It may have been fun, exciting, interesting, etc during the time up till they were Champions, but all that really matters is where they ended up.

I see.

Keep your eye on the ball and Stay the Course.

Just for fun, why do you think this “crash” or “correction” is happening?

In my personal, and unprofessional opinion, I think there are two major reasons for what is happening now.

First of all, we had been flying high for way too long and needed a correction. When people start saying, “I’m up 30%, I should be up 50%!” that means greed is at its peak.

Secondly, there is too much uncertainty regarding coronavirus. No one knows what kind of longlasting effects (or any at all) will occur regarding coronavirus. Uncertainty leads to anxiety and people run for safety.

Put this both together and you get a “crash”.

TL;DR

Stock market has its ups and downs.

However, all the matters is where you are when you are ready to retire.

Keep your eye on the ball and stay the course.

-Sensei

Agree? Disagree? Questions, Comments and Suggestions are welcome.

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