What do we do now? “The market is down 20,% 30%, 40% …” “The great depression of 1929.” “Protect your assets.” “Totally new game, old rules do not apply.”
Let me start by telling you that not every one is panicking. Peace of mind comes from holding to a good strategy built on solid convictions. Those that are guessing (whether they guessed right or wrong last time) are always anxious about the next guess they need to make. Here is where you start.
Belief > Activity > Results
My belief drives the action that produces my results and strengthens my belief. Superior results begin with superior beliefs. Inferior results come from inferior beliefs. Remember, your actions are never the cause of your long term success, your beliefs are!
What am I doing right now?
1.) Belief: I am convinced that the collective genius of the businesses that make up the free markets will be best able to profit from the irrational fear that is gripping the public and being encouraged by the general media. The goods and services that business provides will continue to be in demand and will be delivered at a profit over time. The businesses that do not survive this period will be replaced by better businesses that will profit from their exiting. No one can know which companies will survive and succeed.
2.) Action: I will own more stocks/businesses, not less. I will be truly diversified! I will own a piece of all of the businesses in the best asset classes. I will review my strategy based on my tolerance for risk. I will not try to guess which companies to buy and which to sell. I will not try to time the market (this has been the worst strategy of the last 30yrs!) I will continue to invest in the good times and especially in difficult times.
3.) Results: My diversified free market strategy has given me great confidence during this entire week. I know what to expect on the downside and on the upside over time. Free market investing has produced superior results over every form of active management. Inferior results come from trying to pick stocks, following individual track records, MARKET TIMING, and paying for expensive money managers.
Confidence cycle:
Confidence comes from best beliefs, best beliefs lead to best actions, best actions produce best results, best results lead to confidence in the best beliefs, best beliefs lead to the best action…
Come to our seminar next week at Calvin College Prince Conference Center to learn more about strategies that create peace of mind toward your invested savings. Go to www.vanderwey.com and select the seminar tab to register for the event or simply call my office.
Sincerely,
Steve Vanderwey
616-458-6480