Can you Sleep Well At Night (SWAN) when you invest?
Have you thought about how you can invest and sleep well at the same time? 3 thoughts about "Sleep Well At Night" (SWAN) investing as we emerge or look forward to emerging from lockdowns in our various counties
So what do we do now?
1. Keep a long-term time horizon. Make your decision not based on what the stock market will do in the next week or next month, but rather three to five years from now.
This reminds me of my Safety First post a few weeks ago. Make sure the investments you consider have very little debt, can survive the crisis and continue to thrive.
One thing to consider is how CONSUMER BEHAVIOUR might change after this.
2. Adopt "sleep level" position sizing. Size your positions appropriately. Make sure that whatever you choose to invest in, it is an investment amount (ie size) that you are comfortable with. Obviously, if you got it right, having bought less means you will benefit "less". But I have seen often (myself included) when I take too big a position, I am more prone to panic and the slightest movement in stock prices makes me nervous. End result? I get whipsawed and shaken out, not benefiting fully and maybe even lose money even though I might have got it right initially!
3. Accept you don't have to be the hero who picked the bottom. This is related to point 2. If necessary, invest slowly and take a small position. I do this also because it makes me more interested in the company. It's a strange human psychology but we actually take a greater interest when we have skin in the game. So, buy a small amount, study, observe and as you build conviction, you can always add. You do not have to buy at the absolute low to make the investment meaningful.
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