Accountable Update

2 Tips for Dealing with Market Volatility

Last week at my Rotary Club meeting, our scheduled speaker was a no show. When our President asked if anyone had something they would like to talk about, I offered to present one of my recent Accountable Update articles, 10 Questions for Every Investor.

The article was well suited for an impromptu presentation, with several charts interspersed with practical advice. But when we got to the Q&A, it became apparent that the recent market volatility was weighing on some folks. The question that was seemingly on everyone’s mind was, “When will stocks stop going down?”

My answer, as it is anytime someone asks me what I think the stock market will do tomorrow, is to offer a couple of tips for dealing with market volatility.

High Flying IPOs Often Come Back to Earth

On this day in history, August 9, 1995, I remember where I was. Do you?

I lived in the Dallas area at the time and had recently purchased my first home in the quiet suburb of Coppell. I worked in a Fidelity Investments branch office in nearby Las Colinas as an entry level financial advisor, which meant that I was often the first person a prospective investor would speak to upon arrival.

But I wasn’t in my Las Colinas office that day. I was in Fidelity’s Austin office, on loan to help them out during a period that they were short on staff. Back then, the Austin office was kind of hidden away on the second floor of the Arboretum, where a cigar shop now resides.

Customers had to know where to look to find us. However, on this day, that didn’t seem to be a problem. When we unlocked the front door at 8 AM, there were already several folks standing in line.

“Good morning,” I said to the first gentleman.

“Am I too late to buy Netscape,” he asked me?

“Netwhat,” I replied?

“You don’t know about Netscape,” he asked incredulously?

10 Questions for Every Investor

I talk to myself a lot. Sometimes it is because I work for myself and my boss can be unreasonable. Other times, the conversations are triggered by something I read or see on TV. As an investment advisor, many of the articles I read have to do with markets and peoples’ perspectives on investing. Frequently, reading a headline like “The Market Just Triggered the Hindenberg Omen” will cause me to pause and question my disciplined approach.

It is during those moments of self-doubt that I find myself asking some of the following questions. Whether you’ve been investing for decades or are just getting started, at some point on your investment journey, you’ll likely ask yourself some of them too.

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