Skip to content
Facebook-f
Twitter
Youtube
Instagram

Client Login

  • About Us
    • About Us
    • Our Approach
    • FAQ
    • Contact Us
  • Free Resources
    • Playbook for Relaxing About Money
    • Quiz
    • Confident Investing Sample
  • Podcast
  • Videos
  • Blog
  • Webinars
Menu
  • About Us
    • About Us
    • Our Approach
    • FAQ
    • Contact Us
  • Free Resources
    • Playbook for Relaxing About Money
    • Quiz
    • Confident Investing Sample
  • Podcast
  • Videos
  • Blog
  • Webinars
Schedule a Free Call

Blog

  • March 20, 2020
  • 3:20 pm

The Market Downturn is Not a Loss—It’s a Sale!

Back
Share on facebook
Facebook
Share on twitter
Twitter
Share on linkedin
LinkedIn


Last month we talked about how we ladies love talking about shoes, grandchildren, travel, wine, etc. But what about a great sale??? I think we forgot to mention that one!

I don’t know about you . . . but I love a great sale! When my kids would ask for something, I always told them “I don’t buy anything unless it’s on sale.” I would then explain to them buying things on sale helped us to have extra money to spend on other things . . . like vacations, eating out . . . and important things like investing and education, too!

Of course, here at Paul Winkler, we don’t speculate and gamble . . . so I am not suggesting that you go out and try to stock pick and market time. But I want you to think about the fact that we all love buying things on sale . . . but then when the stock market “goes on sale” so to speak . . . we don’t look at it like we do other sales. When we see that our favorite store is having a great sale, we love it and use it as an excuse to buy what we want right then and there, because we know prices will soon go back up and then that item will cost us more. But when stocks drop, we get all upset and look at it as if we have lost money. However, the truth is, we haven’t really lost money until we sell. Daily values change. They will be up and down. And sometimes, like right now with the corona virus, markets react and drop precipitously. Why can’t we think about this as a great sale instead of a loss?

If we think differently, seeing the downturn as a sale instead of a loss, and if we also realize that our portfolios are invested in many areas of the market, then we can be reassured in times of market trouble. Even more so, as long as we are rebalancing—buying what is low (i.e. on sale) and selling what is high, when the time is right—we are not violating the principles of investing by trying to time the market. When we do violate the principles of investing and try to time the market, we can end up panicking and selling when the market is low (which is really buying high and selling low). And as we continue to invest in a down market regularly, we are buying more when the value is lower (getting more of your portfolio on sale) and effectively lowering the average cost of what we paid for the portfolio.

Of course, we can’t guarantee that markets will rise, but history tells us that three times out of four, the market goes up, not down. Ninety-six percent of market gains have occurred in only 0.9% of trading days from 1963 through 2004. That means that nearly all of the market upside has occurred in around 130 days out of 41 years or approximately 15,000 trading days. Of the 20 largest percentage increase days in the stock market, every single one of them occurred after big declines.

So just try to relax and change your thinking. This isn’t a market downturn . . . it’s a sale!

More to explore

A 2020 Investing Lesson for 2021

January 14, 2021 No Comments

2020 was certainly a year to remember. One popular meme on New Years said, “I’m going to stay up on New Year’s

Image of workspace

Chapter 8: Taxable Accounts

November 30, 2020 No Comments

In a previous chapter, we spent time on the concept of tax-advantaged investing. The idea with tax-advantaged investing is that there are

Women and Social Security Benefits

November 11, 2020 No Comments

The phrase “Hindsight is 2020” sure has taken on a new meaning this year. If anyone had told me on New Year’s

For more information about what we do, schedule a 15 minute chat with and adviser.

Schedule a Free Call

Ready to come on in? Schedule an in-person meeting.

Schedule a Meeting

PWI

About

Contact Us

All Locations

Terms & Conditions

MEDIA

Blog

Videos

Audio

CLIENT SERVICE

Client Login

Become a Client

Connect

Facebook-f
Twitter
Youtube
Instagram
Schedule a Free Call
PHONE : 615-851-1950 (main office)
Fax : 615-851-4597
Email : contact@paulwinkler.com
Main Office : 3050 Business park Circle Suite 503 | Goodlettsville, tn 37072
See our other locations
Copyright 2009-2018 Paul Winkler, Inc. All Right Reserved
The contact of this website is protected by application copyright laws. No permissionis granted to copy, distribute, modify, post or frame any text, graphics, video, audio, software code, or user interface design or logos.