Just as I suspected earlier this year, the stock market has continued to drop as the Fed increases their rates. Here is a quick screenshot of the S&P 500 demonstrating the phenomenon:
Just look at that line! It’s amazing! You don’t even need the numbers that I forgot to clip with it to see how far it has fallen.
Unfortunately, that means my Dad would be begging me to re-think my strategy if he could see the current value of my little investments.
I’m not even mad. I’m over here, cheering on the sidelines because the Fed announced two more potential rate hikes for next year.
By fishing at the bottom of the barrel I’ve limited my losses. There is only so low the values can go, after all. Before this is over my portfolio will end up looking much worse before it gets better but once prices begin to go back up I’ve no doubt that they will leap beyond the piddling prices I’m currently paying.
I’m basing my current strategy on historical information. In the past, the Fed raised rates until something broke in the economy. Occasionally we have entered a recession as a result of this break.
I will be fine if we enter a recession. I work in the discount grocery industry; people will need food regardless. Less money to spend means that more shoppers will visit my little store, so my job is secure regardless. I walk to work so I’ve no worries about fuel costs, and I keep my recurring expenses as low as they can go so I’ve got a bit of wiggle room if prices rise.
Even better on the financial front; Katie’s move has been delayed. We’re not sure when she will be able to marry her beau at the moment, so until she gets things arranged she will be staying here indefinitely. This means that my monthly expenses will remain low throughout most of the winter.
That will give me more money to invest. I intend to invest every penny I can to take advantage of this drop in prices.
Time will tell if my game plan will be profitable in the end.
I applaud your statement: ” I intend to invest every penny I can to take advantage of this drop in prices.”
Why? Because it’s wonderful that you perceive the current market correction as a buying opportunity…instead of an unhappy event.
Folks like Warren Buffett and many others make sure they and their companies have cash/margin set aside
so that they can “shop till they drop” on the lower priced high quality stocks they’ve been eyeing all year.
Kudos!
Oh yeah…I am quietly praying that this dip in stock prices lasts until my income tax refund arrives. In the meantime, I am scrimping as much as I can in order to make another round of investing. I want to stick the largest “bucket” I can beneath the falling stock prices in order to profit from this as much as I can.
That said, I’d be lying if I said I wasn’t nervous. I’m too new at this to be completely confident. I remember watching the expression on my father’s face with his first investment; his fear as he watched the price tank on his single selection, and the defeat in his eyes when he told me that he was going to sell out at a loss. It’s okay to be afraid, though. I wouldn’t be normal if I wasn’t afraid. I’ll just have to deal with it.