A 15% stock market drop in a week should have shaken everybody into developing a financial game plan. Doing nothing is considered one game plan. But doing nothing because you couldn’t be bothered to think about how scenarios might play out is really lazy. It’s better to be lucky, than good. However, what if you’re neither?
Since writing the post, Stock Market Meltdown Implications For Everyone, many of you have asked for specific advice on how to deploy your capital into the markets. Given everybody’s financial situation is different, I’m just going to suggest a five step framework, and use myself as an example.
I’ve lost a ton of money in the markets before, having invested during the Asian financial crisis of 1997, the dotcom bubble of 2000, and the economic collapse of 2008-2009. What has helped me get through difficult investing periods is simply coming up with an investing game plan to account for different scenarios. The fear of investing gets minimized, and rational action takes over.