Friday, March 29, 2013

Short Takes: Worrying about Stock Volatility and more

It was a quiet week on most blogs leading into the Easter weekend. My posts for this week were

Value Averaging Nonsense 

Value Averaging Experiments 

The Value of Math

Here are my short takes and some weekend reading.

Gail Vaz-Oxlade has some advice for investors whose stomachs churn as their portfolios go up and down (in a post no longer online). Her advice is sensible enough, but I worry about telling people to lighten up on stocks if they are worried. The problem is that they will be most worried when stock prices are lowest. Maybe a better answer is to write a letter to yourself explaining how worried you are. Then when stock prices recover, read the letter and decide to lighten up on stocks while prices are high in anticipation of the next drop in stock prices.

The Blunt Bean Counter explains some of the pitfalls of making a housing loan to your married children even if you formalize the loan.


  1. Thanks for sharing these great reads! Happy Easter.

  2. That's a great idea for lightening up on stocks. I agree, if your stomach churns when stocks drop, you can tell in hindsight that you had too many stocks. That does not mean that selling them now is a good idea.

    I'd go on, but I pulled a muscle patting myself on the back for how I handled the last great stock drop, so I need to go get some rest.

    1. @Patrick: I was also happy with how I stayed calm through the stock crash. But I was even more pleased with my mother's calm.

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    1. Here is Lyndsay's comment with a broken link removed:

      I love your letter writing suggestion. It can be easy to let the media sweep you away with worry about your stock holdings when the markets falter, but a cooler head will pay off far more down the line... even if it's hard to do in the moment.

      We've got a post about resisting that tendency to react with fear.