by Scott Ronalds
I’m a summer guy. I love the hot sunny days, blue skies, BBQs, beaches, peaches, hammocks and patios.
But the approach of fall gets me excited too. For sports fans in particular, there’s an excitement in the air right now and a feeling of action that gets the competitive juices flowing. It’s September, baby! Baseball games mean more. My Seahawks are ready to hit the gridiron. The World Cup of Hockey is around the corner. Coaches are strategizing, players are energized and fans are getting, well, fanatic.
For investors, this feeling is a dangerous one. During periods of action in the markets, we often have the urge to do something, which can translate into making changes to our portfolio. Maybe sell an underperforming stock or fund, or jump on a new product that’s been hot. Sitting idle seems futile when there’s heightened activity in the markets. Just do something. Anything.
But investing is irrational. Often the best move is no move at all. To be good at it, we have to take the action and excitement out of the day to day. For Type A’s and sports fans, this can be tough because there will always be a headline about the economy, markets, or the Fed to get our juices flowing.
The summer was a relatively calm period in the markets. September and October, however, have historically been among the most volatile months for stocks. Investors should be prepared for more pronounced swings. When they come, it’s not the time to draw up a new plan of attack or go all fanatic on your portfolio.
For investing isn’t a 60-minute game where constant adjustments are required and success can come down to the final seconds. It’s a long, arduous marathon where results come from patience and repetition of process. So if your portfolio hits a losing streak this fall and you feel the urge to do something, best to go for a run.