playbookHow do you react to when the stock market is down or it gets bumpy?  Do any of these sound familiar?

  • Fleeing into the arms of a charlatan who purports to having predicted it
  • Buying into Black Swan funds and protective products that cap all future upside and cost a fortune
  • Obsessing over hedges after the fact
  • Selling out with big (permanent) losses and sitting in cash
  • Freezing 401(k) contributions or having retirement cash allocated to money market funds
  • Excessive trading
  • Planting a flag and being unwilling to publicly change our minds in the face of new evidence
  • Throwing money at bizarre alternatives like coins, bars, bricks and bullion which have no proven ability to fund a retirement
  •  Conflating political views with investment expectations

Every one of these things is extremely detrimental to our financial health.

Nothing kills the long-term returns of a portfolio like throwing away the playbook in the heat of a market crisis.

Source: TRB