Trading was suspended from March 17 – 18, 2020 at the PSE. What I expected to be a time to reflect and calm the nerves of investors didn’t materialize. Today March 19, 2020 the market opened hysterically going down to the 4,000 level!
From a peak of 9,000 points in 2018, that’s a loss of 56% and we still don’t know the bottom of this. Everyone’s in panic mode now, and it doesn’t help that we are all so stressed locked up in our homes wondering if our food supply is sufficient, worrying about our health workers and other front liners, those who still have to go out to work, those grieving the loss of loved ones who died of the virus and were not even given proper goodbyes, wondering how we can sustain this disruption of supply chain for our food and basic services, the survival of our hand-to-mouth existence countrymen, the resulting peace and order situation if they are not fed, while we are led by a government that lacks foresight and clarity on what to do.
Haah… let me just express all that. Now let us all take a deep breath and go back to the intent of today’s article.
Some things are worth repeating. I’ve written a couple of times about the emotional cycle of investing. And yet, here we are once again, in need of that reminder in order to step back and calm our nerves so we don’t join the band wagon of panic selling in the stock market.
If we invest our long-term money in the stock market, we should be able to tide out this covid-19 crash. But hey, we are all “limbic-brained,” this writer included. My only difference probably is that I’ve seen a few market crashes in my lifetime (among them were in 1987, 1997, 2008), and I study Behavioral Economics which always reminds me to embrace and work around both my pre-frontal cortex (my rational brain) and my limbic system (my emotional brain).
With the market now down over 50% from its peak, it is no wonder that I receive nervous private messages asking me if they should sell now.
My answer: If you heeded my advice that your stock or equity investment should be your long-term investment, that’s 10 years or so, then there is no reason for you to sell during this kind of market. Just sit tight and remember that this too shall pass.
Again, let me present to you the different stages of the emotional cycle of investing.
This time I decided to turn it into a mini ebook. This way, you can download it for free, store it in your device for easy access.
Once you’ve downloaded it, try to imagine superimposing your face or that of the emo investor you know, to bring more life and fun to the message! J This way, the lessons will stick even better. Then forward the link to people who might benefit from it, including the one whose face you superimposed on the emoticons of the 14 stages.
Hopefully, it will be easier for you to access this mini ebook any time you feel you’re getting too irrational about your investing again. And I’m not just talking about crashes. I’m also talking about the irrational exuberance that will surely come about months after the dust settles. Let this book be your pampa-kalma device when it comes to your stock investing, a needed asset in everyone’s portfolio. Here’s the QR Code to download the free mini ebook.
I wish you all well. Let us all do our share in this crisis. Let us all pray and cooperate. We need to act as a nation now more than ever.
1. You may now purchase my two Babylon books in digital form. Click the following links to buy on Amazon.
2. FQ: The nth Intelligence is also available online but still in print edition.
Rose Fres Fausto is a speaker and writer on money and family. Click this link to read samples – Books of FQ Mom and FQMom.com to see other services. She is a Behavioral Economist and Certified Gallup Strengths Coach. She won the grand prize of the first Sinag Financial Literacy Digital Journalism Awards in 2014 and was recognized as one of first InLife Sheroes (She-Heroes) Awardees in 2019. She also sits in the board of the Ateneo Center for Economic Research and Development) Follow her on Facebook & YouTube as FQ Mom, and Twitter & Instagram as theFQMom.