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Gwen Preston – “Follow your plans, not your emotions”

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Gwen Preston – “Follow your plans, not your emotions”

 

 

 

 

 

It’s no fun out there, no matter what kind of investor you are.

But don’t act on emotion. If you didn’t sell a two or three weeks ago, remember why. It’s likely because you decided that you preferred to just hold through whatever comes because you expect mining stocks to perform well out the other side and you are a buy-and-hold investor, not a trader.

 

That’s a fine decision.

 

It was also a fine decision to sell some stocks ten days ago, to reduce exposure slightly and raise cash to have available to deploy should lower prices become available. That was the right decision for someone like me who likes to do some trading, to mitigate short-term market impacts, while holding most stocks through whatever comes.

 

What’s not likely a great decision is to watch markets falling day after day and eventually get too upset and sell. That is the process most likely to see you sell at or near the bottom when lots of investors capitulate to the emotional strain of times like this.

 

When you’re stressed, step back and think about why you own mining stocks: because you believe gold has to perform well out of this global financial setup, because value plays are likely to shine now that growth has had its run, and because the green revolution is ramping up metals demand just as supplies are declining following years of insufficient investment.

 

Those arguments remain totally valid. They have been relegated to the sidelines for the short term, unfortunately, because that’s what dramatic moments in economic and investor history do. But they will resurface.

 

So stick to your plan. If you plan to hold through – perhaps don’t look at your portfolio for a little while. If you want to try to buy at the bottom – I don’t think we’re there yet.

 

I wrote a note on last week’s inflation print, the market reaction, and how retail traders – many of whom started investing only two years ago and so haven’t seen a bear market yet – could spark another leg down in the general markets. It’s a short note though, as my outlook hasn’t changed much. I’m glad some of the stocks in the Maven portfolio are holding ground better than average. I’m glad I exited a few and reduced exposure to a few others. And the ones I decided to hold come what may – I am trying to not worry about their share prices at the moment.

 

 

Posted May 16, 2022

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