With the 2020 USA election almost here, a lot of people in the investing community are wondering how it can all affect the Stock Market situation. And today, I’ll give you my take on the situation.
Hello everyone, and welcome back to Investing with Antoaneta. In this blog, we are going to have a quick look at something that a lot of investors have been discussing – the upcoming elections and their potential effects on the Stock Market. As always before significant events like this one, people are worried about what will happen with the stock prices. Should they sell? Should they hold and weather the storm? Or, maybe, they should be buying instead?
And if you’re asking the same questions, then you’ve come to the right place. Because, today, I’ll not only give you your answers but also share with you what I’m personally going to do with my own portfolio. That’s right – I’ll give you the exact same strategy that I plan on using. Check out my other blogs such as, “The Stock Market Is Very Volatile Now, Should You Be Doing Something?“.
We’re going to kick off this one with a short talk about mindset. Yep – it’s time to talk about mindsets once again.
A lot of people seem to be convinced that successful investing is all about knowing when to buy. Well, okay, not all about it, but let’s say … ninety percent of it. So, it’s 90% figuring out what to buy and when to buy it, and then 10% for everything else – like deciding when to hold, when to sell, and so on.
But let me tell you something – these people are wrong!
Knowing when to sell (and hold) is just as important. And, my recent Tesla blogs are a great example here.
I bought a whole bunch of Tesla stock back when it was really cheap. Then, I held on to it. Even when the company was going through difficult times, even when the market was struggling, I just held on to it. Why?
Because I know when to sell and when to hold. And that was a time to hold. And, if we take a look at the price of Tesla stock today, compared to a couple of years ago, you will see that my call was 100% correct. I actually made a ton of money with this move. In case you missed the Tesla blog where I talk about this, I’ll drop a link down in the description for you. I highly recommend checking it out.
Figuring out the best time to sell your shares actually involves doing a lot of research and thinking ahead. When you buy a good stock, when you get into that winning position, you generally want to sit on it. And why is that?
Because we’re long-term investors. Because we look for companies that will be successful down the line.
So, if your position looks really promising and if you see huge potential returns in the future, then you know that you’ve made the right choice.
But don’t worry, it isn’t just you. A lot of investors out there struggle with finding the most optimal time to sell. This is usually because of one of three factors:
- Emotions (hype, worries, regrets, etc.)
- News and media coverage (hype trains, specific companies get the spotlight while others get left out, forum and YouTube posts, etc.)
- Major world events (like, I don’t know, a pandemic? An election? Both at the same time? Yeah…)
And we talk about this all the time here on our channel. If you want to be successful, you need to keep a level head. You need to be calm and collected.
Sadly, the people who fall victim to this, usually end up selling at a loss. Sometimes, if the loss is significant enough, they might just quit investing and never look back. And, if you ask me, that’s really sad.
Remember, guys – events cause temporary volatility. News and media coverage can also dramatically shift public opinion for a brief period.
But, the stock market always balances itself out!
If a company was good yesterday, and nothing major actually changed about it, it will still be good tomorrow.
Not only are these types of losses 100% avoidable (and all experienced investors out there warn against them!), but they’re also something that you can learn about. Every mistake that you make, every negative situation, should be treated as a learning experience. Both in life and on the Stock Market. That’s the best way to grow!
(By the way, that was a free “win-at-life” tip there for you guys. You are welcome.)
Remember how the initial COVID situation shook the market? All stocks dropped in a big way. The media was just spamming doomsday messages, people all over the forums and message boards were panicking. Everything was just pure chaos.
But what happened after the market eventually bottomed out? The prices started going back up. Today, the prices are pretty much stabilized. Yes, it took a bit of time, but we eventually get back.
A lot of the people who sold their positions back then are really sorry now. Some of them might have even quit the stock market forever. All of this happened just because they fell into the trap. They forgot the long-term picture.
And it’s going to be similar to a major election. Just like any big event, it is almost guaranteed to bring more fear, more uncertainty, and more doubt, resulting in volatility.
So, if we know that all of these factors are likely to affect a lot of investors out, there are likely to fall into these traps, what can you do? You can profit from it!
- First and foremost, should do your best to not all the media situation affect your judgment.
- Keep your attention focused on the future.
- Don’t worry about the short-term.
- Think long-term.
Don’t do something silly like trying to time the market. Don’t sell out of your positions, thinking that the prices will crash and then you can just buy back into everything and be at a profit.
We don’t do this, because we’re long-term investors!
Besides, if it was that easy, everyone would be a billionaire, right?
There is not a single person out there who can tell you for sure what is going to happen with the market. If someone is claiming otherwise, they’re lying.
If you’ve probably already guessed by now, but personally, I’ll be holding onto my positions. If my favorite companies drop in price, that’s actually great for me – I can get even more stocks for cheaper. This is basic stuff; we’ve discussed it before many times. Short-term volatility is actually good for us.
So, in summary:
- Do yourself a favor and don’t fall for the hype.
- Don’t take advice from the media.
- Don’t panic-sell.
- Always think long-term.
- Stick to your chosen strategy.
Well, that’s everything I had to say about the stock market before the election in USA. Again, this is pretty much long-term investing 101. Still, I know that a lot of you are probably worried about what might happen, so I just felt like I needed to address it. As usual, if you have any questions, leave them in the comments section down below. And, if you are enjoying my content, don’t forget to give the blog a thumbs up and share it with your friends.
Thank you all for reading, and I’ll see you all later.
© Lifestyle Tips by Antoaneta
Recommended for further reading:
- Business Secrets from the Bible – Daniel Lapin
- MONEY Master the Game – Tony Robbins
- Unshakeable: Your Guide to Financial Freedom
- Rich Dad’s Increase Your Financial IQ: Get Smarter with Your Money
- Money: The Top 100 Best Ways To Make And Manage Money – Ace McCloud