The portfolio approach comes into its own today.
1. Had I remained tactical, I would have struggled decisions re buy/hold/sell in the final thirty minutes of Thursday’s session.
2. It wouldn’t have ended there. I would now be struggling with the same decisions right now. Had I opened on Thursday, do I close into today’s strength? Had I opted for ‘wait and see,’ do I chase prices here?
So Thursday I capture every penny of the decline – however, this morning I also capture every penny of the recovery. And hopefully, my bottom line ascends over (enough) time.
Back to the train analogy – a ton of investors disembarked on Thursday. There are many train routes (Sacramento to Reno) with steep drops and slow climbs through dazzling scenic views. A passenger comfortable knowing he will reliably arrive at the summit is able to sit back and enjoy the dips and rises, the twists and turns.
That’s the beauty of buy-and-hold.