''Come to the edge,'' He said. They said, ''We are afraid.'' ''Come to the edge,'' He said. They came. He pushed them... and they flew.
Guillaume Apollinaire
The answer to this plain question should always be a resounding no: it never pays to give into panic. The smartest option is to derail this emotion before it gains any traction. Once fear takes over, the end is nigh.
When the markets were disintegrating approximately two weeks ago and if you were one of the lucky few that opted against joining the bandwagon of panic, you should have had a feeling of déjà vu; sort of like the movie groundhogs day. The same-old twaddle that was broadcasted before was once again intoxicating the masses; like cockroaches, these naysayers emerge from the woodwork and hum the same-old hymn “the world is going to end” and or financial disaster is around the corner. In each instance, you will find that the same rubbish is spun in a different way; this is recycling at its best. What they so conveniently omit is how each and every single one of these so-called end of the world events proved to be nothing but a mouth-watering opportunity for the astute investor. Now we are not stating that caution should be thrown against the wind. What we are simply stating is that if you become one with the fear, then this useless emotion will take over and blind you from seeing any opportunity, even if it slaps you hard on the face. Never become one with fear; understand that when it comes to trading fear is on par with toilet paper.
Let’s take a sombre look at what is actually going on, and why these events are unfolding.
It’s more than obvious that the market was in a corrective phase or crashing if one joins the naysayer’s camp; the more appropriate term would be letting out steam that was long overdue. The last week of August was the worst week for equity markets since 2011. One could also point out that the markets have not experienced a significant pullback since 2011.
So what changed over the span of 1-2 weeks to warrant such negativity? Very little actually
- China devalued its currency to boost exports; it had to; we are in the midst of a currency war, and most nations other…
