“Everyone has a plan until they get punched in the mouth.”
Mike Tyson, former heavyweight boxing champion
I would bet you that Mike Tyson is not much of an investment manager. Like me, I am sure that you have read multiple stories over the years about how he has wasted his millions of dollars of career earnings.
But Iron Mike got one thing right. The quote above describes perfectly how the vast majority of professional investment advisors react when the stock markets begin to go down.
The U.S. stock markets have been punched in the mouth multiple times in the last week. The reaction of the talking heads in the financial media has been predictable.
“This is the buying opportunity that we have been waiting for.”
“The stock market pullback is long overdue.
“Now is the time to buy the stock that you like when they are On Sale.”
Let me share a very important stock market investment management secret with you. There is no stock market wisdom in the above quotes. Each of these thoughts comes from a person that does not manage money for a living.
When the stock market moves down in a big way there is no such thing as timely and relevant investment management information in the financial media. The best thing to do is to turn it off and tune it out.
Right now, you have to have an investment management plan. That plan begins with a question. That plan ends with a timeless piece of investment management reality.
The question is, “How much pain can you stand if the stock market continues to go down?” Pull out your March investment account statement. Go online this week and recheck your investment account balance. Take your pulse on how you feel when you calculate the difference between those two dollar amounts.
The reality is that the last few years of stock market gains have all been on paper. Those investment gains are not in your pocket. Stock market investment gains mean nothing until they are in your pocket once-and-for-all.
The stock market is punching you in the mouth now. How are you going to react?
Ric Lager
Lager & Company, Inc.
