“Simplicity, patience, compassion. These three are your greatest treasures.”
There is no alternative (TINA) is an old phrase being used today by some as a reason for the highs the stock market has been experiencing. In this TINA market investors are buying stocks despite their all-time high values because there is nothing else worth investing in.
Most of the trading being done is not by those of us trying to build a nest egg but by the “machines” or algorithms run by the big funds and banks. They are programmed to look for opportunities to buy and sell quickly taking advantage of small changes but with large numbers of shares. Gone are the days where stock market valuation is a pure reflection of sentiment and behavior of the individual investor. Nevertheless, individual investors are also still buying.
Is there an outside chance that this also means that we will no longer experience severe market crashes or long periods of economic stagnation.? Very unlikely!
It’s tough to resist the behavior of the crowd (or the machines) especially when it looks as though we may miss out. FOMO is built into our DNA. It comes from our survival instinct that tells us there is not enough to go around and we might not get what we want or need. Overriding this instinct can offer a different and often very effective strategy….Doing Nothing.
If you are invested in a long-term strategy and don’t plan on using the money in the next 10 years. Don’t buy more don’t sell any….do nothing.
If you are a day trader or fund manager and are frustrated by lack of opportunities to differentiate yourself from indexes ….do nothing.
If you are in the market for a house or rental property and everything seems expensive….do nothing.
If you feel the need to invest just because you feel like you need to be doing something….do nothing.
If feel inclined to go shopping because you’re bored….do nothing.
And if you have nothing to do…. enjoy it while it lasts.
When it comes to money issues try to discern if your decisions come from FOMO, if so then stop and rethink. Patience will yield the best opportunities.
This Holiday season give yourself the gift of doing nothing and be thankful for the epic run your retirement accounts have enjoyed over the last 10 years.
“Simplicity, patience, compassion. These three are your greatest treasures.” — Lao Tzu, Tao Te Ching