Stand There

Wait 5 sec.

You don’t have to do something. You don’t have to panic, you don’t have to raise cash, you don’t have to rebalance. You don’t have to look for tiny tax losses to make yourself feel like you are in control. You are already in control! Doing nothing is an exercise in that control. Even if today certain policy and decision makers (ahem) don’t seem to have a plan at all, you have one. You made a plan long ago when you decided what kind of investor you were going to be. The kind that sets an investment policy and sticks with it. The kind that made that policy because you knew that there would be moments like this where you did not know what to do. So you decided in advance!Yes, daily swings of 5-10% are wild. And that wildness triggers something in us that we MUST ACT! Surely being on the plains of the Serengeti, freezing at the sight of the lion would not lead to good outcomes. But the market isn’t a lion, your brain just thinks it is. Standing pat won’t get you eaten. Overreacting in the markets might, however. As the saying goes – Don’t just do something, stand there. It’s okay to stand there.