Rapidly falling markets are indeed scary, but they need to be addressed rationally and not emotionally. That is one of the main reasons, if not the main reason, for our website. We want to take emotion out of the investment process and let our readers invest calmly and rationally, in all circumstances. So, let’s take a deep breath and see what really happened over the past week.
Despite the talking heads screaming “the sky is falling”, it probably isn’t. Even though our Foreign ETFs (EFA, VGK and VEU) changed trends to Long Term Downtrend from cautionary. The media needs to create drama to keep their viewers attention and we don’t blame them for playing that up all they can. A market in rapid decent provides a great way to create drama, but as investors we need to maintain calm and think with a clear head.
When we look at the big picture for our domestic markets, and not just what happened last week, we see that the markets declines, while very dramatic, just took us back to the levels we were at in the middle of August. Obviously no one likes to lose two months worth of gains, especially in one week, but sometimes that happens and we have to accept it.
