Yesterday’s market rout was a reminder of how quickly markets can move on us

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Futures show a small rebound at the open of trading this morning, but who knows exactly where the markets go from here.

Periods of extreme market volatility can present opportunities to put excess cash to work, accelerate the implementation of certain investments or make some tweaks around the edges.

If one is appropriately and fully invested, however, seldom does it warrant making wholesale or radical changes.  It can be unsatisfying for my clients to hear me say it at times, but often times the best thing to do is do nothing.

It reminds me of an excerpt from a book I’m currently reading, “The Psychology of Money” by Morgan Housel. 

He writes, “There is the old pilot quip that their jobs are ‘hours and hours of boredom punctuated by moments of sheer terror.’ It’s the same in investing.  Your success as an investor will be determined by how you respond to punctuated moments of terror, not the years spent on cruise control.

A good definition of an investing genius is the man or woman who can do the average thing when all those around them are going crazy.”