2007 was not the best year ever, but people could still handle it. 2008 was worst and we had a terrible month of September. While October gave us our shares of gray hair, it is now time to cash in a few bucks of what is left of your investment portfolio. Is it the time to panic? Hell no! It is the time to withdraw just enough money to pay you a good massage at the spa! After the government financed 85G$ to AIG, their CEO spent a full week in a spa. Want to blame him? I think he just did right!
It is now the time to relax
While it seems to be easier to say than to do, you simply have to take actions and help you relaxing in this turmoil. I suggested you go to a spa, but anything that can calm your anxiety will work. Some might take vacation, others listen to music with a good glass of wine; all methods are good methods when it comes down to managing your anxiety.
At the end of October, I took a week of vacation. It was not related to the market since I had scheduled this period to study for my MBA exams. Even though I had to open my books and work the whole week, I still took the time to relax and do stuff to change my mind off the TSX and the S&P 500.
I actually went to see Madonna in Montreal and spent a whole morning with my son at the park. I swear that I was able to take the stress away and think about other stuff than losing money on the market. In fat, this thought is not hurting me much. However, I am having a hard time convincing clients (for their own good) to stay in the market instead of going into a GIC.
Unfortunately, each human being has it owns limits. I recently had a client who lost 25K on his 150K investment overt the past year and a half. Scared, he decided to switch his remaining 125K into a GIC. I had a long and complete discussion about the market and how it fluctuates over time. I even made the demonstration that it would take him 5 years to recover his 150K with a GIC without counting inflation and taxes. Therefore, the poor man will have to wait about 7 to 10 years to get his capital back while I am convinced that the market will recover from this bear market faster.
So before ordering to sell everything, take a moment to relax and ignore what is going on the market for a few weeks. You will definitely increase your life expectancy and put a smile in your face
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