Get Excited By Red and Depressed By Green

I am not talking about traffic signals – I mean the stock market and its movement upward or downward. I get excited when I have money to invest in a market and it goes into the red. I worry about my investable income when I see the market in the green for an extended period.

In plain language, I am just in my mid 30’s so now, I am not bothered at all about the market being low. I don’t buy and sell frequently on every ups and downs, I don’t care by how much stock market goes up or down every day. I hate frequent stock trading.

“Wall Street makes its money on activity. You make your money on inactivity.” – Warren Buffett

Stock market is at two years low, in the last few months I didn’t notice my portfolio growing. It actually lost value. When you are losing your net worth it’s difficult to stand still and do nothing. My hands are itching to act and do something to improve my return. It’s hard to control a decision-making move at this point, a decision to sell that is.

Damn! when your stock goes down from $50 to $30 you get seriously pissed off, ain’t it? You feel like selling it off to save your rear, whatever is left of it.

Every fund and stock I own is down from the year-ago value. Even after making $50 – $100 monthly contributions to each of the funds I am losing my net worth.

Should I succumb to “common man syndrome” and sell stocks now, at a loss? No, I won’t. I am one of those types who buy on every opportunity and hold forever. I get excited seeing red. I wait for blood to flow out enough before killing the monster.

I have 30 more years to work. I will have plenty of opportunities to sell my stocks later during market highs. I get depressed when I see green for an extended period because my money goes into sleep mode in an ever-depreciating checking account otherwise. I was depressed the entire year in 2010 as I couldn’t buy enough stocks but, now I am happy and excited that I was finally able to put money into the market.

When you buy stuff, you like it when things are on sale, right? Why then the stock market be any different?

If I see stick market in deep red, I don’t look out for doomsday bells on TV or the internet. I don’t cry of a bloodbath. Rather, I rejoice. It gives me another chance to increase my retirement return. Since I am a net buyer, it’s in my favor to get stocks cheap. It’s in my favor if stock market remain depressed for next 20 years.

I am naïve at detecting minor stock fluctuations. When I see the Dow industrial graph, I can easily find two points (one buying and another selling) where I could have realized a significant return in a very short period. But trying to do so in future is extreme foolishness; had I tried, I would have paid most of my money to the stock broker in terms of brokerage fees.

When you trade in anticipation of quick money, you actually make your broker rich. The next time your hand itches to click on that sell button when the market goes down, don’t! Let the urge pass and don’t make an impulse sell. If you are in the market for the long-term, exercise discipline and stick to your plan don’t get panicked seeing market going down. Believe me market will come back up eventually.

In a way, the discipline required here is similar to the practice of frugality amidst the leering attraction of materialistic pleasure in a world where credit cards make buying anything so very easy.

Try to maximize profit from a depressed market buy your stocks on sale!