Stock Market 2022 Capitulation Day

There is something in the stock market known as “capitulation day.”
Capitulation day is the day when stocks are down so much that everyday investors give up. They say, “This is not for me, I’m done.” Then they sell everything.
Unless you need the money right away, do NOT sell everything on capitulation day. Capitulation day is when the the big investors get back in and start buying. They make their money based on your panicking.
I have no idea if today is capitulation day. I suspect it is not. However, with stocks, everything is based on your “time horizon.”
If you have 10-15 years left to invest, then stay in the market and ride it out. I did some buying today. It could go lower, but passing up good companies that are 50% off in the hopes they are 60 or 70% off is not what I’m about.
Again, if you are nearing the end of your working life, that is one thing. If you have over a decade of working life left, do not panic.
I’ve been doing this since 1994. The U.S. stock market always bounces back in the long run. This is because America always bounces back in the long run.
I believe in the U.S. stock market because I believe in the USA. I believe in American ingenuity, American corporate creativity, and American exceptionalism. Every time we have faced tough times, we have bounced back.
Are these tough times? Sure. However, this is not Pearl Harbor or 9/11. It’s not even the 2008 financial crash. Not yet anyway.
I am a rah-rah cheerleader for America, but not just because of a sense of duty and patriotism. I believe in America because the evidence tells me that betting against America and Americans is a fool’s errand.
Do what is best for your personal life, health, wealth and those you love. Do not have rose-colored glasses. There could be plenty of short-term pain ahead.
In the long run, I still believe U.S. equities are the best place to put your money.
1) Buy good companies.
2) Roll over the dividends.
3) Don’t sell.
4) Don’t die.
Also remember the words that are on my bedroom wall.
(Not the stuff about getting paddled by Mistress Evil. The other words.)
Investing (like life) requires character, guts, and the knowledge that at the heights of ebullience and the depths of despair, this too shall pass.
If you have a reasonable time horizon and you own good companies, do not let panic drive you out of the stock market.
Keep your cash ready. When everyone else is ready to give up, be bold and brave.
Capitulation day will come. When it does, be buying, not selling.
Like every trader/investor, I get plenty of things wrong. Yet in the long run, I turn out to be right. That is my story because it is the story of the stock market. It is also the story of the USA. We get some things wrong, but in the long run on the big things, we get it right.
Stay calm.

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