The stock market never performs in a truly predictable way.
When the market gets especially volatile, I always hear the voice in my head from “Star Wars” telling me to “stay on target.” It’s not that I’m thinking of veering off, as I want to blow up the Death Star (so to speak) as much as Luke Skywalker did.
It’s very hard not to act when everything seems as if it’s blowing up around you. In most cases, though, buying and selling just because the market has dropped ends up being a mistake.
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Certainly, volatile markets create buying opportunities, and if you have dry powder — available cash — they’re a good time to make a move. Adding a new position or buying more shares of a favorite at a favorable price can help ease the pain of deep losses.
But like the young almost-Jedi looking to do the impossible, sometimes you need to just stay on target.
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In this video, shot on a windy Celebrity Silhouette cruise ship on a day when people were panicking about President Donald Trump’s tariffs, it felt like a good time to remind investors not to panic.
Exhale, stay on target and, hopefully, the force will be with you.
How a stock market investor handles market volatility (1:43)
Don’t be scared by market volatility
Transcript:
Hello investors, I am Dan Kline. I am the co-editor of TheStreet.com and I’m coming to you from Celebrity Silhouette. So my other job is executive editor of our cruise product, Come Cruise With Me.
But as ridiculous as it is being on a blustery pool deck, I wanted to talk a little bit about market volatility and sort of reassure people. One of the things Todd Campbell, my co-editor at TheStreet here, [suggests,] and I believe [in it,] is buying really good companies and holding onto them for a very long time. If that’s the strategy you’ve followed, it does not matter that the market is down.
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Tariffs don’t matter, the president doesn’t matter, Congress doesn’t matter.
What you need to look at is: Is this company that I believed was good — that could be Royal Caribbean, that could be Starbucks, that could be Microsoft — are those companies still what you thought they were? Now, if the CEO changed, if something fundamentally changed, maybe you don’t believe in them that much. But most good companies will weather the storm.
Markets go up and down
And as you go through the ups and downs of, oh my God, this happened and the market’s up a thousand, remember the market has traditionally, not traditionally, has always recovered. So if you’re in this for the long haul and you believe in the companies you’re buying, don’t look at the market every day.
This isn’t a baseball game. It doesn’t end. It doesn’t matter what the score is in the fifth inning in a 300-inning game. Remember why you invested and that is to pay for your retirement, to buy a house, to pay for a wedding, to buy a boat, whatever, to get those ab implants, whatever it is.
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Remember: You have a long horizon, and even if you are retired and you’re putting some of this money to work, have faith that traditionally, 12, 18 months, the market comes back. I know it’s terrifying, but we are here with you.
I am Dan Kline. Stay with us at TheStreet.com.
