Worried about the stock market?

Is this really the top?

Pull up a (virtual) chair and let’s chat 🪑

So. Things are getting a little crazy out there.

TikTokers are spewing financial advice.

Carole Baskin is peddling penny stocks.

Everybody’s like “OMG my mom’s-best-friend’s-cousin made so much money in the market, c’mon it’s so easy!”
Makes you feel a little like this, right?
(couldn't resist the Zoolander reference)

Your portfolio is up, but Wall Street is throwing around the b-word (bubble) and you’re afraid it’s about to pop.

What do you do now?
First, you need to BREATHE. Don’t make any rash decisions.

You don’t know if this is the top. Nobody does.

Here's a dirty little secret: even the smartest Wall Street investors have a terrible track record with calling the top.
Why? Because 99% of all record highs haven’t been the top.

There were 1,150 $SPX record highs from 1950 to mid-December 2019.

Only 13 of those record highs weren't followed by another record high in the next 12 months.

OK, so you're not gonna call the top here. Good.

But you don’t know what happens next.

You can’t control the future, but let’s focus on what you CAN control.
Do you need your invested money soon (like in the next five years)?

If you do, then maybe you should take some profits. Don’t get greedy.

If you sell, consider putting those profits in more conservative assets, like bonds or cash.
BTW, I like this piece from @dollarsanddata on knowing when to sell in a crazy market:

Are you able to wait a few years? Then it make may sense to be patient and stay invested.

Market drops are painful, but stocks have always bounced back.

Since 1950, bear markets (20% drops) in the S&P 500 have taken an average of 25 months to recover.
FYI: The S&P 500’s tech bubble market recovery took about 5 years.

The financial crisis recovery took 4 years.
That sounds hard, though.

You can’t stomach a big drop in your investments!

Have some perspective.

The S&P 500 has rallied 70% since March, and is now 13% above its pre-pandemic highs.

We've come a long way.
If you’re truly worried you’ll make a rash decision and sell in a market slide, then consider diversifying.

Add some conservative assets (bonds, cash) to your portfolio.

They could help soften the blow if stocks get hammered.

Feeling better? I hope so.

Selloffs can be scary, but the best investors know how you react to them is what truly matters.

You’ve got this 👊

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More from @callieabost

11 Jan
Seeing a lot of popular names down big today, so let’s have a little chat.

What do you do when your hot stock is falling fast?

💥 (a thread)
Check your goals.

When do you need this money?

Now? In a few days? In a few years?

If you have time to wait, then it could make sense to hold on for now.
Remember your why.

Stocks rise and fall. It’s the nature of the market, and swings are the price of investing (h/t @morganhousel).
Read 10 tweets
10 Jan
What are your money insecurities/priors?

Be honest. We all have them.
I'll start. I grew up lower-middle class with a few rough patches, and I didn't learn a lot about money.

The feeling of losing it all is real to me, so I fear that it'll happen again. No matter what $ amount my accounts have.
I also fear the future, and worry that how we're preparing won't be enough for our (future) kids/careers/plans/unexpected emergencies.

That's probably made me a little too risk-averse.
Read 6 tweets
29 Dec 20
It’s been a crazy, wild, wacky, tragic, ~unprecedented~ year.

And @justLBell and I have written some 🔥 notes as we’ve tried to make sense of it all.

A 🧵 with some of my favorites ⬇️
Some background: we're a team of two writing research for a scrappy lil brokerage.

When I started in February, our plan was to eventually put out weekly notes as we built out our content.

A few days later, the market peaked. And we wrote our first of many weekly notes.
(you know that saying, the best laid plans often go awry?)

Read 11 tweets
14 Dec 20
.@justLBell and I wrote a little thing on the five market lessons we've learned in 2020.

It actually got me thinking about one big lesson I've learned in life and in markets this year...losing control.

(am writing more but my maintenance guy swung by)
OK...losing control.

I'm a super type A person, to the point where I've had pretty debilitating anxiety for a while.

It's been a rough year for all of us, but it's been a special kind of awful for those who struggle with anxiety and other mental health issues.
Read 11 tweets
18 Sep 20
The IPO market is on 🔥 and everybody wants a piece of it.

Just look at Snowflake’s debut this week: it was the best for a >$1 billion IPO since 2013.

Are these IPOs worth the hype, though?

@justLBell and I take a look (and serve up some tasty data)

2020 is on pace to be the strongest year for IPO activity since at least 1990 (the beginning of our data). Image
It's also been an especially good year for the IPO class of 2020.

In 2020, about 73% of all IPOs have climbed on their first day of trading, including *every* IPO larger than $1 billion. Image
Read 6 tweets
16 Sep 20
You may be seeing a bunch of economic charts these days that look like a broken V (right side of the V is cut in half).

Retail sales isn't one of those. Consumer spending, while slowing (and in a tenuous spot), has fully rebounded back to pre-pandemic levels. Image
(screenshot from my BBG because I just cannot even today)
Here's a look at retail sales going back to 1990 (red bands are recessions).

You'll see that the "V-shaped rebound" in consumer spending didn't happen during the Financial Crisis, but it did in the early 2000s recession. Image
Read 4 tweets

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