The only thing guaranteed with the stock market is volatility including both ups and downs. For some reason, I enjoy checking on my funds daily. I remember reading a Fidelity Study that one group of people who have above average returns in the market are the deceased. You read that right; the dead are excellent investors and it is because they are unable to change their allocations. In the same study, another group who outperformed were people who forgot they had accounts. Weathering the ups and downs of the market and not jumping in and out of the market is the best way to come ahead.
One mental trick I play on myself to weather the storm of volatility is to be happy whether markets are up or down. If markets are up over the last few months, then look how much money I have. That is a great feeling.
The other market direction is downward. To be happy when the market is going downward requires a little more knowledge of the market. First the market cannot grow forever upward. “Trees do not grow all the way to the sky” is a common saying by distressed debt investor Howard Marks. At some point if stocks are inflated, then they will return to the mean. Business’ can only grow so fast and eventually expectations will outgrow real growth.. When this happens then stocks will eventually snap back to be based on the companies that they represent. Therefore, if you are constantly buying you should welcome pullbacks and recessions because it allows you to buy the company at a cheaper price.
Think of an asset you own, possibly a house or a car. If someone comes a tries to buy one of those for half the price they are worth, then you would surely refuse their offer and wait until prices rebounded.
Think of stocks in a similar way. When you are buying them then hope the bottom falls out and hopefully you can hold for decades in the future when their value will be a multiple of its current price.
Millionaire Librarian 