Sentiment plays an enormous role when it comes to investing, when people throw in the towel and panic you can forget about studies, stats, history, etc., everything takes a back seat.  Unfortunately, decisions are made by the mass when they reach a point when they can no longer take the pain. That is normally at the tail end of the move.  When this happens, it takes them a long time to trust the market again.  The charts below help you visualize what all investors go through.

By no means do I want you to look at these charts and say; “I’m going to hold my stock portfolio to the very end, it will come back.”  A majority of stocks don’t come back, indices do. “The Russell 3000 index measures the performance of the largest 3000 U.S. companies, 98% of the investable U.S. equity market.  40% of the stocks had a negative return over their lifetime, 20% of stocks lost nearly all of their value, 10% of stocks recorded huge wins over 500%.  80% of the gains are a function of 20% of the stocks. –The Ivy Portfolio

  • You need to learn how to live to fight another day.
  • Acceptance is key to a long-term investing career.  You will be wrong, accept that fact.
  • Don’t fall in love with individual stocks, they are nothing but pieces of paper.
  • I need to liquidate has no idea who “a good company” is.  When panic sets in, the good companies go down the same waste line as the bad ones.
  • I know you heard this one before; “The market will stay irrational longer than you can stay solvent.”
I need you to realize that there is a light at the end of the tunnel, crisis investing:

My name is Frank Zorrilla, a Registered Advisor in the State of New York.
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This information is issued solely for informational and educational purposes and does not constitute an offer to sell or a solicitation of an offer to buy securities. None of the information contained in this blog constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable for any specific person. From time to time, the content creator or its affiliates may hold positions or other interests in securities mentioned in this blog. The stocks presented are not to be considered a recommendation to buy any stock. This material does not take into account your particular investment objectives. Investors should consult their own financial or investment adviser before trading or acting upon any information provided. Past performance is not indicative of future results.