How Investors Should Mentally Prepare for a Boring Market

It’s been a busy month for the Rule Breaker Investing podcast team: Between the regularly scheduled episodes and the bonuses, listeners have gotten more David Gardner than ever. But he’s not done quite yet, because as is his wont, he’s wrapping up by responding directly to questions and comments.

In this mailbag episode segment, he addresses a query on the subject of the investor’s mind-set: After years of thrilling gains, listener John fears he’ll grow bored when the economy slows down — and he expects it will. So how should he emotionally brace himself for when the investing world gets a bit less exciting? And, as a bonus, we’re tossing in a quick answer to David’s second question of the show: Where’s a good website for figuring out a stock’s split-adjusted returns? Because if you’re a long-term Foolish investor, odds are that you’re going to hold many companies through more than one stock split.

A full transcript follows the video.

10 stocks we like better than Walmart
When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, the Motley Fool Stock Advisor, has tripled the market.*

David and Tom just revealed what they believe are the ten best stocks for investors to buy right now… and Walmart wasn’t one of them! That’s right — they think these 10 stocks are even better buys.

Click here to learn about these picks!

*Stock Advisor returns as of May 8, 2018
The author(s) may have a position in any stocks mentioned.

This video was recorded on May 30, 2018.

David Gardner: Rule Breaker mailbag item No. 1. This one comes from John Fitzpatrick. John, on Twitter, you’re @ImASuperball. Congratulations, sir! Not really sure what that means, but it sounds awesome.

You write, “I believe that I’ve run an investing course familiar to many Motley Fool subscribers. Try investing on my own and quit when the going gets tough. Get some professional help and acquire an investor’s temperament. Grow disenchanted with the costs and performance of mutual funds. Get some knowledge. For me, this was The Motley Fool. Go back to investing on my own in stocks, where I find myself now.”

John goes on. “The past eight years have been exciting as I divest from mutual funds to stocks in this new age of emerging titans. Question: I’m no longer worried that a downturn in the economy will scare me away. Rather, I’m worried that I will become bored as the economy slows for a period. What words of wisdom do you have for me to prepare myself emotionally when investing and/or the economy become a little less exciting?”

Well, that’s a fun question, John, and a great way to kick off Mailbag Week. I think, first of all, investing has been exciting. When the stock market has risen many of the last eight years double digits, and that’s just kind of compounded upon itself, admittedly after two of the worst market years in memory — we kind of dug ourselves back out those first five years or so, and then we’ve gone on to some new highs since then — it is exciting.

It is fun to think that checking the market on a given day, week, month, quarter, year, that you’re going to see, “I’ve made money! I’m rewarded! Look, honey! Look how far we’re up! Aren’t you glad that we went back and added to Facebook in the downturn?” Those kinds of thoughts and conversations, it’s very natural to feel that this is exciting. This has been among the most exciting periods for any common stock investor, not just in my lifetime, but I think in the history of the American stock market. Very rarely have we had this kind of uplift measured over almost a decade.

So, John, you’re very right to ask yourself, what are things like when it isn’t this way? The truth is, there are certainly times where the market not only goes sideways, but goes down, sometimes doggedly so, over the course of 18 or 36 months.

So, your question, what words of wisdom do I have for you to prepare yourself emotionally when all this becomes a little less exciting, here they are. And this is not personal, I’m having fun here. Get a life! What I mean by that, John, is that there are so many things outside of the stock market and our investing to be excited about and to be doing. When I say get a life to you or to me or to any of us, I’m just trying to convey that we shouldn’t get too hung up checking our stocks. It’s always great to see positive reinforcement and to know that it’s not just an atta-boy that the market gives you when your stock doubles, but it actually leads to real financial independence over time if you do well as an investor. That’s the goal for most of us.

But whether the markets are up or down — maybe especially when they’re sideways or down — I think you and I start to realize, we could spend our time in a lot more productive ways than just checking our stocks or following the market. I don’t spend any time watching CNBC. I think the amount of time I’ve spent watching CNBC over the last three years probably rounds to below 30 minutes, and that even includes walking past an airport TV or a bar tuned in to CNBC. I spend no time with financial television.

But I sure do check my stocks, and I always have, multiple times every single day. I’ve likened it to being a sports fan. You’re not going to change your favorite team based on whether you’re winning or losing. But darn it, isn’t it fun to watch the games? See, for example, as a baseball fan, we have 162 games every year, almost every day, to check in and see, watch the game itself or check the box score, check the stats. Not going to sell my favorite team. Realize we’re going to have some winning streaks and some losing streaks. But, isn’t it fun to keep track of it? And it is.

But, there are many productive ways to spend our time outside of this. I have to admit, any time I talk to someone who likes sports less than I do — having just spent time in Iceland in the last week, one of our guides and drivers, great guy, didn’t even realize or care that Iceland’s football team is headed to the World Cup! That they did so well in the Euro finals a couple years ago! He was kind of oblivious to it. And I said to him, “Svenny,” that was his nickname, his actual name is way longer than that and harder to pronounce. I said, “You have saved so much time over me by not paying too much attention to sports.” And I’ll say the same thing to anybody who’s not following the markets too much.

To conclude, John, I would say, there are so many wonderful ways for you and me to spend time adding value to the lives of others and deeply enriching ourselves, that when the market finally does go sideways or down, I hope you’ll remember that I said that, and I bet you and I will be spending our time more productively during that time, ironically, than when the market’s rising.

Alright, Rule Breaker mailbag item No. 2, this one comes from Hoboken. Mike, @mike_hoboken. My producer, Rick Engdahl, and I had a little debate about how to pronounce the word Hoboken. We’re pretty sure it’s the one in New Jersey. The thing with Rick arguing is that he lived in the city, so clearly, he’s going to be right. I was saying, is it Hoboken or Hoboken? Which one is it? Hoboken? That’s it, Rick gave me a thumbs up. OK, good.

Anyway, Mike. Your question. “Many podcasts ago,” Mike writes, “you mentioned a website you use to calculate split-adjusted returns. I can’t locate that podcast with the website. Would greatly appreciate it if you could reenlighten me. Thanks in advance.” You bet, Mike!

It looks like it’s still working. I think this is still a good website. Now, the reason I’m mentioning this is, this is not Bloomberg that I’m giving you when I give out this URL. This is a smaller, looks more like a home brew, circa 1990s, almost, web interface. It’s The tag line for the site is “Free information for the serious investor.” And yes, I’ve bookmarked this one. Mike, and all others, whether you’re in Hoboken or somewhere else, and if you’re ever looking for, like, how has Starbucks done since June 3rd, 1998? This is a good site where you can come in and see the returns. And yes, they’re split adjusted, and I’m assuming — I sure hope they are — that they’re accurate. I use it, and I would suggest you use it, too.

It’s particularly good for investors, that is, people who act, by definition, for the long-term. This is a very valuable site for us, because we can see, how has Facebook done over the last 11 years, let’s say. Answering those kinds of questions — which are, to me, the most important and the most fun questions to answer of all. So, is there for you, Mike, and all others.

David Gardner owns shares of Facebook and Starbucks. The Motley Fool owns shares of and recommends Facebook and Starbucks. The Motley Fool has a disclosure policy.

You May Also Like

About the Author: Over 50 Finance