Sunday, October 16, 2022

An Open Letter To New Investors

Dear new investors,

If you had started your investment journey within the last two to three years, it is a bumpy ride to begin with. When things were starting to get rosy, COVID-19 had shaken the world, not just on the physical health front, but also on mental and economic fronts, too. Yet, there is a silver lining amongst this period of gloom, with work from home, or WFH, related counters experiencing a boom (especially the technology sector).


Just when we thought things were going back to normal, we were inundated with a series of unfortunate events and happenings: the global supply chain squeeze; inflation soaring with spiking of interest rates trying to combat it; rising energy and commodities prices; geopolitical situations, and so on, which directly and indirectly caused the financial markets tumbling back to COVID-19 times, and some alluding it may get worse.


When your first step into the investing world was this tumultuous, it was natural to feel fear, panic and confusion. You might have had a sort of mismatching of expectations: “investing was supposed to be smooth sailing, as what my family members/friends/peers had experienced before, but it was not to be when I started”. You may be wondering what you had done wrong, or whether your luck with investing is out of sync. The stock that you had just bought gone down X percent, and the REIT that you had recently entered had made you lost Y dollars. Yes, I had seen these lamentations going on around me, in real life and on virtual platforms. It is understandable to have such reactions, which could range from mild pessimism to outright despair. 


However, as with all things, markets and economies go through a cycle. Right now it is on the downhill route. When will it bottom out, or resume going up, is anybody’s guess, but they are going to happen someday. In the meanwhile, remain calm, continue to invest (either through periodic contributions or to seek out opportunities in such times) and ride out the storm.


As investors, we should not be concerned about returns over one day, one week, one month or even one year. Investing is a long journey, which I had always reiterated, and it should last at least ten years. This period, although trying, will represent only a short event in your investment path. Therefore, do not let the general situation hamper your thoughts and well-being. 


As cliché it may sound, and difficult to carry out in practice than in advice, but it works most of the time: keep calm and carry on.


Yours truly,


The Bedokian.

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