Recently we had been inundated by a lot of goings-on in the financial markets and economy, and most of them were not-so-good stuff. If you had paid attention to the recent news, we have a global energy crisis, the Evergrande debt crisis, the ongoing COVID-19 crisis, the United States debt crisis, etc. After knowing these, does it feel like the whole world is falling around you?
Well, short of a big catastrophe which involves a large meteorite, a massive alien invasion or extreme weather changes that you see in the movies, life still goes on. In fact, it is at such down times that opportunities come a-knocking in other places. Other asset classes, regions/countries, sectors/industries, and companies may be enjoying some uptime during this period.
And if you are diversified well enough, you may be enjoying some slight gains, or experiencing some slight losses. Diversification is meant to protect against such times, so the heartache is not as bad as a concentrated investment portfolio on the affected areas.
If you had noticed, this would be my nth blog post on staying calm / cool / composed / "ohmmmmmm” in trying moments. Though I may sound like a nag, being human however we have the “fight or flight” instinct built in us, and this behaviour extends to our investment decisions, which may likely result in bad ones. So before selling off everything in panic and run for the hills, we should take a step back and take stock of the situations and scenarios.
Stay calm and stay invested.