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Is My Money In The Stock Market Disappearing During The Coronavirus Crisis?

Yes…the stock market is volatile.  Yeah…a bear market.  But the money is not just disappearing.  You still own something called shares.  Shares of some of the best financed, most profitable, well run companies in the US and the world.  

Let’s try this analogy.  Pretend you own 10 properties.  Ten single-family homes.  And everyday the property appraiser swings by your 10 homes and does his inspection and analysis.  And everyday he prepares a report of what those homes are valued.

Some days they’re worth a little more.  Some days, a little less.  And you don’t really care.  You don’t plan to do anything with these homes for years.

Then one day you read his report and all your properties are down.  Really down in value.  Like, 30-40%.

Even though today’s report shows they’re down in market value, you still own 10-houses.  Ten real things. Real estate.

Are you going to run out and sell those 10-homes just because they’re down in value?

Not likely.  You know the permanent long-term trend of homes values is northeast.  Up and to the right.  Positive.  

I think we freak out when it comes to stocks and mutual funds because we don’t see the property.  It’s intangible.  We can’t drive over and stand on it.

Remember,  when you own shares of a stock, you’re a partial owner of a company.  Maybe it’s indirect ownership through a mutual fund.   If you need something to stand on, you could look up the holdings of your mutual fund and see what companies the fund own.  Then go to Walmart, Target, Costco, the Apple Store, (when they reopen) the Chevy dealer.  Look around the house and maybe you’re a part owner of Clorox, Proctor & Gamble.  Look at your meds.  Maybe Pfizer or Merck are in your fund.

All those Amazon boxes around the house.  Maybe you’re part owner.

It’s real stuff.  Real companies.  And you still own a piece of them.  

The money only disappears if you relinquish your ownership.  And no reverse Grandpa’s. Selling low and buying high.  The proper response is:  Sonny Boy, buy low...sell high.