Don Steinmann's Investment Tip of the Week

Don Steinmann's
Investment Tip of the Week

A Marathon Not a Sprint

And you thought last week was bad. For Nasdaq stocks, this was the worst week on record. Remember though, that the Nasdaq didn’t exist in 1929. I’ve talked with a number of people over the last week that are really concerned. Some have been hit really hard. I spoke with one woman who has watched her portfolio value drop 40%. I reminded her of two things.

First, I told her that though her portfolio was down that much, those same stocks are up 50% or more over the last year. In October the Nasdaq average was at 2800. If you had told someone it would rise to 3300 by April they would have said “Wow, great times ahead”, as long as they didn’t know the Nasdaq would hit 5000 in-between. Though the Nasdaq has fallen 30% from it’s high you still have to call it a correction, not a bear market. These stocks came up a long way very, very fast.

Second, I asked her a question. Where do you expect your stocks to be in 3 to 5 years? If the answer is up, then she didn’t have anything to worry about. Investing in stocks is a marathon, not a sprint. Just because someone passes you 20 meters into the race, doesn’t mean you won’t blow by them 20 kilometers into the race. If her answer wasn’t ‘up’, then that would be a different story.

I’d also like to remind all investors that the Nasdaq and the Dow aren’t the whole stock market. If you look at the drillers, miners, retailers, reits, railroads, they are asking ‘What drop?’. These and many other sectors are virtually untouched. And it’s worst in the US. Many of my readers from outside the US haven’t seen anything like the drops we have here.

Finally, I have my saying about the market. There are two times in the market, good times, and buying opportunities. So looked at the right way, it’s always a positive market.

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