During an investment update recently, an investment manager remarked that the markets since the start of the year have been really stable with very little volatility.
There was silence. Then the punchline followed.
“Volatile markets means that the markets go up and down. Since the start of the year, the markets have only been down, down and down. This is also a form of stability.”
At times when the indices are a sea of red, humor is one of the few comforts we can still allow ourselves. However, for those who have seen their portfolios shrink, it is certainly no laughing matter.
Amongst the current correction, there is a very valuable lesson I’ve learnt some years ago when it comes to investing – The difference between “The Drop” and “The Bounce. Not understanding this difference can be costly and as a matter of fact, it has been for many who have invested during the technology boom and are still holding on to the investments waiting for it to recover.