Monday, January 21, 2008

Why I'm not worried

OK. Calm down. Breathe. You're going to get through this.

I'm not going to lie to you, it's not pretty. The TSX has been a ski-slope downwards all year, and all of 2007's gains have been wiped out in the first three weeks of 2008.  And today's 600-point loss is just the cherry on top -- although I suspect there's more to come.

If you're new to this game, you're probably cursing your rotten luck for jumping in at the worst possible time, or worse, blaming yourself and thinking you're the only dummy managing to lose money on the stock market. You're not -- we're all in this together.  And I promise you, there's a way out.  

The old me would have been right there with you. Whining, and wincing, and screaming about the injustice of being cheated out of money for doing the right thing and investing even while everyone else my age is blowing their cash on vacations, cars, and consumer debt.

But that's not me anymore. There's a new sheriff in town, and his hand is calm and steady when he's staring down the bad guys. I'm not worried. For a few simple reasons.

Thanks to the pruning I've done in recent weeks and months, when I look at my battered portfolio today, there isn't a single name that I don't think has the ability to weather this storm and be a thriving, growing business several years down the line. Not next week, or next month. But down the line. And I'm likewise sure that those beleaguered stock prices are one day going to be worth much more than they are today -- not to mention much more than what I paid for them -- at some point in the mid to distant future. Gone are the penny stocks, the poor-quality income trusts, and of course, the Biovails (down another 5% since I sold, not that I'm keeping track or anything  :)  ) that ordinarily made me worry because they were speculative flyers I bought out of greed. I'm down to the bedrock I'm building my future on.

I'm looking at the banks, large-cap ETFs, asset managers, REITs and of course, failed textile manufacturers that populate my portfolio and I like what I see. I don't necessarily like the numbers next to them at the moment, but I'm sure these are the companies I want to own for the long-term. That's how I'll sleep tonight.

Will you?


Div Guy said...

I'm not worried either. The markets will go up and down and there is no need panic. In fact, I plan on purchasing more financials this week.

nancy (aka money coach) said...

I'm not quite as sophisticated in my analysis (I'm a money coach, not an investment type) - I just know I have a number of solid companies and (to me, more importantly) 25 years til I have to start counting on those stocks to buy my groceries, so that's how I'll sleep.

Oh, and knowing my over-priced condo in Vancouver likely won't go down (I don't think it's a bubble. or not one that's going to have a massive burst) AND I get to renew my mtg in the fall with presumably low rates.