The End Is Nigh...

Wow. To be alive in October 2008. What a time. The end of time, perhaps, if you were to believe all that is being said and written right now.


Do yourself a favour. Turn off the TV, radio, computer. Forget emails. Ignore bloggers (all bar one, of course). And relax.


Really - relax! Capital markets work (by and large). Sure, they go mad sometimes. Like right now. In time you will get your reward for risking your capital in the markets. We just don't know when.


Am I pretending that what we are going through is somehow fun? To be ignored? NO!


It is what it is - the market sorting out "inefficiencies" with all the finesse of a sledgehammer. Because fear and greed are two dominant emotions for all of us nearly all of the time, to some degree or other. And right now, fear is stalking the markets and driving down asset values in a bewildering way.


And, just as bewilderingly, at some time in the future (who knows when, eh, market timers?) the markets will rise, sharply and for prolonged periods. If you are not invested at that time, then you don't get to play. Simple as that. Sell now and turn paper losses into reality. Sell now and guarantee that you will not enjoy a return on capital.


So stay in your seat, get ready for the half-time pep talk, and enjoy the second half. Just don't try and guess when it will begin!


Sit tight. Do the smart thing and do absolutely nothing. If you have shares in Northern Rock, Bradford & Bingley et al, then cry a little bit. Because that money has long gone - it ain't coming back. If you own individual shares, take the medication and hope it works. Really - what are you doing owning shares in individual companies? What do you (or your stockbroker) know about a particular company that the rest of the market doesn't? I mean, you are all invested in collective funds, right? Funds that invest across hundreds and hundreds of companies, helping to diversify risk and capture most if not all of the returns the capital markets offer over time. Right? Right?


Oh, and by the way, the property market hasn't even started to fall yet. Give it time. This is a bubble going back a long way (well, over a decade anyway). Of course, falling property values mean nothing if you can afford your monthly mortgage payment. No doubt most if not all of you can. So, again, forget about it. Forget about the incessant media coverage of something that is completely out of your control.


I mean, come on - were you really patting yourself on the back when property went up & up, year after year? What the heck did it have to do with you and how clever you were? So, likewise, now it's in freefall, don't beat yourself up. It's out of your control. Remember, like gold and commodities and all the other "fail safes" your home has no expected return - it is just where you live. Unless you can't make the mortgage payment, of course, in which case it could soon be where someone else lives.


Not funny? I know - but at the moment you are either crying or laughing and the latter feels better to me. Thanks for your time.