Long-Term Investing During Volatile Markets

by | Mar 4, 2022 | Blog, Videos

It can be tempting to change the plan during volatile markets. But that’s the exact time you SHOULDN’T be making wholesale changes to your investments.

In this weeks video, Casey discusses how long-term investors should be handling the stock market volatility caused by the conflict in Ukraine.

The stock market is the only market where shoppers want to run out of the store when prices drop!

Show Notes

How Geopolitics Impacts Markets – Ritholtz

How Do Major Events Affect the US Stock Market? – Mullooly Asset Show

https://tpmullooly.wistia.com/medias/tyav3vpo1m?embedType=async&videoFoam=true&videoWidth=640

Long-Term Investing During Volatile Markets – Full Transcript

**Click here for a downloadable PDF version of this transcript**

Casey Mullooly: Keep watching for an update on how the Market’s responding to this Russia and Ukraine news.

Casey Mullooly: Welcome back to the Mullooly Asset Show. I’m your host, Casey Mullooly, back with you for Episode 282, it’s good to be here. And things are moving faster than ever. I recorded last week’s video on February 23rd, and the S&P was down about 12% at the time of the recording. And then Thursday, Friday, right after I recorded, of course, we saw the Market go up anywhere from 4 to 6%, depending on what index you looked at. And now, I’m recording this on March 4th, and this week has been, the Market’s been backed down. So, things are moving very quickly, information is at all of our finger tips quicker than it ever has been before. And, we know that it’s tough to stay patient and stick to the plan when things are as volatile as this.

Casey Mullooly: That’s why last week I walked through history, walked through some big events, and the corresponding Stock Market moves. And, I wanted to do something similarly, but this week I wanted to show you a visual chart of, one of our favorite charts here, from Michael Batnick at Ritholtz Wealth Management. This is called his Reasons to Sell chart, and it looks at all of the major events that I talked about last week, of the last 100 years or so, all the major geopolitical events, and the corresponding Stock Market moves.

Casey Mullooly: Visually, it gets the point across that if you’re a long-term investor and not a day trader, it’s easy to see that all of these events actually look like buying opportunities. Of course, we have the benefit of hindsight, and I’m guessing, I haven’t lived through all of them, I’ve only lived through the last two decades or so. But, it sure didn’t feel like a buying opportunity in the moment. In the moment, it felt horrible. I’m sure there were scary headlines flying around, and it was hard to stomach that.

Casey Mullooly: But, when it comes to investing, what makes it so interesting and so frustrating, depending on how you look at it, is that more effort doesn’t necessarily translate into better results. It’s not like playing sports where you practice, practice, practice, and you’re the best one on the team. It’s not like studying in school, where you hit the books hard enough and you’re going to get good grades. It’s not like working out in the gym, where you go consistently, and you put the time in, and you get good results. Investing doesn’t work like that. And it’s so counterintuitive, because more activity, more trading, doesn’t necessarily translate to better results, over the longterm. In fact, there’s research out to are that shows the exact opposite is true. The famed Vanguard investor, Jack Bogle, has a famous quote of him saying, “Don’t do something, just stand there.”

Casey Mullooly: So, look. Some of our indicators are getting too pretty oversold territory, they’re getting pretty washed out. And, if you’re a longterm investor and you’re averaging into your portfolio, you’re averaging into your accounts, your retirement accounts, and this is actually a good thing because you’re buying shares of your funds, of your stocks, at lower costs, which is of benefit to you over the long run.

Casey Mullooly: So, if you’ve got questions, concerns, or just want to talk through the plan, get in touch with us, let us know what questions you have. That’s it for Episode 282, we’ll be back with you next week for 283.