So, the stock market is in a sell off.
Or a correction.
Or a panic.
Or a downturn.
Or being manipulated by the Deep State.
It depends who you’re listening to, I suppose.
This morning the DOW (DJIA) hit a low of 23,778 which is a 10.7% drop since January 26th.
The technical definition of a correction is a sustained 10% drop.
We’ve since regained 733 points to put us at 24,511 representing a 7.9% correction.
What’s Causing This
A few things.
1. Inflation fears.
2. Interest rate fears.
3. Automated trading selling off as stop losses are hit.
Should I Be Worried?
Markets correct and sell off occasionally.
It’s the nature of the beast.
If you’re a short term investor – day trader or swing trader – then this is probably causing some heartburn.
If you’re positioned like we are at the Investor Insights, it’s not that big a deal.
We focus on alternative investments across 4 categories that are fairly insulated from the public markets.
Investments in PRIVATE companies mainly on a revenue share or interest-paying basis.
Investments in PRIVATE debt held by consumers and private companies.
Investments in microcap and nanocap cannabis stocks and exchange-traded debt securities.
Investments in PRIVATE syndicates, note funds, and eREITs.
Across all of these categories, there is only one asset class we invest in that’s effected by the market and that’s pot stocks.
And that portfolio is currently showing an average gain of 95.63%.
Our crowdfunded revenue share investments are still paying us 14%.
Our private loans are still paying us 8%.
And the opportunity I shared in the inaugural issue of Real Passive Profits, my premium passive real estate investment newsletter, is still paying 12%.
So, I’m not worried.
When I hear about people panicking and selling, I remember a few Warren Buffett quotes that have served me well over the years…
“Be fearful when others are greedy and greedy when others are fearful.”
Which is the value investor’s mantra.
That’s when they start scouring the market buying up blue chips at deep discounts and holding them forever for steady gains and dividends.
“The stock market is a device for transferring money from the impatient to the patient.”
I see so many impatient people selling and announcing they will get back in.
I’m not even sure what that’s about but it probably went something like this:
1. They bought a stock.
2. It went up and they had an unrealized gain.
3. It went down and they sold and had a realized loss.
4. Now that they have lost money, they will look for an opportunity to get back in on the way up.
That makes no sense unless their job is to make it super easy for the patient investors to swoop in and lock up those future gains.
The way I manage the only part of our portfolio that has market exposure, our cannabis stocks, is this…
1. We bought a stock. (23 of them, actually)
2. The portfolio went up and we had unrealized gains.
3. I identified 7 stocks that had gains of 200%+ and I sold enough shares to cover our initial investment. (We booked a realized gain of 300.67% and $4,273.27 in cash)
4. Now that we have eliminated our risk, we hold long-term and enjoy the ride back up.
And a lot less stressful.
Don’t panic and let the other guy win.