Psychologically, the human reaction to a Bear Market and a real Bear in the woods is the same: fear. Our response is typically flight or fight. It's not our fault, we are hard-wired that way.
Today was a volatile day in the markets. The Dow Jones Industrial Average dropped over 1,000 points. The S&P 500 wiped out the entire gains for the year (albeit it's only February). There were roaring bears and scary big red numbers and down arrows on every news station.
So what?
In today's episode, I'll help you reframe today's events and perhaps future market drops as well. Yes, this will happen again, and again, and again. It's what the market does. It goes up, it goes down, it goes back up.
I'm not going to talk Alpha or Beta or Sharpe ratios or any other technical terms. This is about managing your emotions and controlling your behavior. I will do a little bit of simple math, just to help you put today (and other down days) in perspective.
Let me know what questions you have. Stay calm and carry on.
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