The Serenity in Patience… and Buying in Stages

When the market took off like a scalded cat on Thursday, I could sense all of the FOMO buying (Fear Of Missing Out) as the DOW hopped more than 1.5%, the S&P 500 popped more than 2%, the NASDAQ jumped more than 3% at their highs during a single session.

These are unheard-of moves. At least, they were before the pandemic. Now, these kinds of moves are nearly commonplace both headed higher and dropping lower.

I sat back and watched as investors who had panic-sold during last week’s rout flipped to panic-buying during this week’s rally, and I can’t help but think, “Man, am I glad I Buy in Stages rather than buying all at once.”

If this really marks the bottom and we don’t test the 2022 lows, sure, I missed buying near the bottom in some of my positions. However, I still added to nearly all of my positions at some point during 2022. Plus, I have plenty of cash on the sidelines to add more just in case this really isn’t the bottom of this bear market.

By being patient, watching price action, making a plan, and Buying in Stages instead of all at once, I enjoy the luxury of not feeling the need to buy during panic rallies like Thursday because I already have established-positions. Additionally, I also get to avoid the terrifying need to cut my losses during panic selloffs because I’ve already taken profits at higher levels, and, instead I get to look for opportunities to replace the shares I sold at much higher prices.

There are a myriad of day-traders out there who thrive on the dramatic emotions these kinds of volatile swings can bring, but, for me, with my 20+ year time horizon, I’d prefer to grab a bag of popcorn and simply be entertained by the market’s moves.

No fear of missing out. No panicky need to protect my capital. Just entertainment on the day-to-day with success over the long-term.