It's Ok To Be Human
“Hey, are you guys seeing this?” I walked out of my office yesterday to talk to a few of my coworkers about the market/headlines because when the tape is melting down I find human interaction much more enjoyable than Twitter. “Crazy right?” said Sean. “Wow,” said Eric. “Is it close to a bottom?” asked Ryan. I proceeded to wander down the hall to talk to a few portfolio managers. “We’re studying our shopping list,” said Katie. “This kind of stuff can happen,” said Kris. I ended the journey in my friend Ellen’s office where she yelled at me that I touch my face too much (something the CDC warned me to stop doing).
The S&P500 is down over 13% this week in what is the fastest 10% correction in history. 6 days…it took 6 days for the market to plummet from its top sparked by fears of a spreading pandemic. I scoured the internet for every single take on this move in the media, Twitter, blogs, and podcasts. I have consumed charts showing the long term gains in the stock market, how compounding is the key to success, and how corrections like this happen all the time. I even spoke with my advisor about my plan and how its behaving. But you know what? Even armed with all that knowledge and advice I think it’s still okay to say “wow, this is rough.”
We use percentages all the time in this industry, but moves like we’ve seen this week are felt in dollars. Losing 13% in 6 sessions seems innocuous but losing $130,000 seems real. We are living breathing things with a brain that produces all kinds of hormones, we do not exist on an Excel spreadsheet and we are not wired to ignore emotions. If the news and the market move this week wore you out then guess what? You’re a human being just like the rest of us.
I polled a dozen of our advisors and asked them, “did you get more calls this week?” Some said yes, most said no, and not a single one of them said their clients felt panicky. Look, it’s easy to feel smart in a bull market, to sit in an index fund that only goes up. It becomes really hard when your human brain kicks in as the market drops like a stone. If this entire episode has you paralyzed, or you just need someone to talk to, reach out TODAY to a professional who can help. Baird has offices all over the country. Here’s a link.
My friend Conor Sen tweeted this today; “You can play path or destination but not both. Path over the next 3-6 months is unknowable so better to focus on the latter.” He’s right. What could anyone possibly know about the next few months of a potential pandemic? I don’t care what their charts or indicators say. One of the best minds on Finance Twitter, Morgan Housel, said, “There are only 3 edges in investing 1) you can be smarter than everyone else 2) you can be luckier than everyone else or 3) you can be more patient than everyone else.” What’s your edge right here, right now?