The stock market does not interest me a lot, to be honest. I don't own that many stocks. I don't follow my portfolio as much as my friends think I should. I don't interact with my broker that much - and my broker's recommendations are usually left as that: recommendations. I still decide on which to invest in - and when to bail out - which is almost 'never'.
My portfolio is full of, well, boring stocks. I guess if you were to rate the "excitement" level of the stocks that I own on a scale of 1 to 5 with 5 being the max score and 1 being the minimum score, mine would be in the -1 to -2 region.
I guess it's all part of the strategy: Let time run its course.
I know I'd be really down if I did monitor my stocks on a regular basis, I would be torturing myself for every downward change in my portfolio - and I know that I don't handle these pretty well. So why torture myself?
Anyway. I digress.
My thoughts about all these? I am no expert - but let me weigh in some thoughts: If there is such a thing as irrational exuberance, consider the possibility of irrational depression or gloom.
Finance theories assume that markets are efficient - and that their efficiencies are derived by the availability of information. I would go a little further and say, it's not so much the availability of information that matters - it's the response of people towards the morass of information that they - collectively and individually - receive that matters more.
The dot-com bust (well, it's the only one I really am familiar with - not that I was burned) taught us irrational exuberance. The things that are happening now could well be irrational gloom or irrational depression.
And the funny thing is, we find ways to rationalize why we are in "depression". (Pretty much similar with the psychological, "clinical" depression - we rationalize why we are depressed!) Hindsight bias - hindsight is always 20/20.
Am I immune? Of course not. Is anyone immune? I doubt so.
It is human nature. We are "wired" to think this way.
The best we could do: Let it run its course. And wait.
