Last week and now this week has been consumed by the news of the Debt Ceiling. Congress saying one day that they are close to a deal, then the next day they walk out, appearing no closer to end the discussions.
If you’re in the market, chances are you’ve already heard about the Debt Ceiling and how it needs to be raised by X day. This seems to me (I could be wrong) a political play that causes the markets to act irrational. The day can start green, end red, or vice versa, and you may be sitting their thinking, WTF?
If you have read a few books about the stock market, there is a common name given to the markets. It’s called, Mr. Market. And Mr. Market acts irrational in the short term, you can see that on the day by day, but when you scroll out, change your time horizon, you might see that Mr. Market is a bit more on the bright side.
The market has an ebb and flow, there are market crashes and recessions, pull backs, and what most consider bear markets. There is another side, when you zoom out, you see the bull markets, you see the markets heading to higher numbers once these bear markets are over. When the bulls are in charge, they lead you higher and higher than the previous dips. Yes, it may take a few years, but this is the long game.
Don’t buy at the top and sell at the bottom. Buy and hold. That’s it. That’s the strategy. It doesn’t matter what is happening in the news or what congress is doing, or not doing. What matters is that you buy good companies, who have a great moat, and will be lasting through the recessions, down periods, and market crashes. Buy and hold. You’ll see, or maybe you already have.
When you hold, while everyone else is selling, you gain an advantage. When the market turns around, you don’t have to re-buy, and you might honestly have a great average if you average down. So when people are done panicking and start buying again, you sit back and see the stock price go up.
If you are one who sold when everything was crashing, what did it feel like when the market gained its footing and drove up and up, over where you were when you first bought? Use that experience, buy and hold. If it’s too painful to watch, then turn the TV off, disable your phone’s market and app notifications, and get some rest. It’s one of the hardest psychological things to do, watch your money go further into the red, and do nothing, but you more than likely will be rewarded for holding on.
Buy great companies with a moat, buy and hold. All this Debt Ceiling talk will eventually be done, and congress will find another item to send to the media to cause the market to be upset in the short term. Remember, you are in for the long term!
How many market crashes or recessions have you bought and held for?
Thrifty Investing 
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