Skip to main content

Silverlight Asset Management, LLC

  • Home
  • About 
    • Team
    • Our Philosophy
    • Contact
  • Process
  • Services 
    • Our Services
    • Investments
    • Asset Allocation
    • Resources
  • Blog
  • Login

   

Without Pain, There's No Gain In The Stock Market

    You are here

  1. Home
  2. Blogs
  3. Without Pain, There's No Gain In The Stock Market

  

Without Pain, There's No Gain In The Stock Market

Submitted by Silverlight Asset Management, LLC on February 2nd, 2019

 

According to Lipper data, investors moved over $190 billion into money-market funds in the final quarter of 2018—the biggest dash to cash since 2008.

How many got back in to catch the best January rally in over 30 years?

Whipsaws are painful. And all too common in the stock market.

Another example: Apple issued a profit warning after the market close on January 2nd. Investors scampered to the sidelines the following day, which also marked the recent bottom. Adding insult to injury, Apple shares rallied 6.8% after lackluster earnings were later released on January 29th.

If you find investing to be frustrating at times, join the club. It certainly can be. The right moves often feel counter-intuitive.

Case in point: it was painful to buy Apple shares on 1/3/19. But also the right move, in the short-term at least.

No pain, no gain.

To be a successful active investor, you must learn how to control pain so it doesn’t control you. Discipline is critical.

You can practice building your pain tolerance in ways that don’t involve trading.

For instance, a ritual I recently adopted is jumping into my unheated pool first thing in the morning, when the water is around 55 degrees. It’s a shock to the system!

Cold-water plunges have certain health benefits, like reducing inflammation in your body.

The main benefit for me, though, involves mental conditioning. Just before I’m about to jump, part of my brain—the part author Daniel Kahneman calls System 1—screams: “Don’t do it, this is going to hurt!”

I force myself to jump anyway, because I know that learning how to consciously override the weak voice in my head builds mental discipline, which makes me better in many facets of life. Including my work as a professional investor, where I sometimes have to force myself to make moves that don't feel good.

The painful trades often make the most money, particularly at critical turns.

"It's not supposed to be easy. Anyone who finds it easy is stupid."

- Charlie Munger

Speaking of painful, how about active managers’ returns last year?

According to data from Morningstar and SPIVA, only 38% of U.S. equity funds beat their benchmarks in 2018, tying 2006 for the worst year of overall relative performance since 2000. The outperformance of defensive sectors in Q4 apparently caught many fund managers flat-footed.

Will this year be any easier? So many market narratives are shifting in early 2019, it’s hard to keep track.

One big change this week was the Federal Reserve pivoting to a more dovish interest rate policy. The video below (2-minutes) chronicles market moves accompanying that shift.

 

 

 

Originally published by Forbes. Reprinted with permission. 


This material is not intended to be relied upon as a forecast, research or investment advice. The opinions expressed are as of the date indicated and may change as subsequent conditions vary. The information and opinions contained in this post are derived from proprietary and nonproprietary sources deemed by Silverlight Asset Management LLC to be reliable, are not necessarily all-inclusive and are not guaranteed as to accuracy. As such, no warranty of accuracy or reliability is given and no responsibility arising in any other way for errors and omissions (including responsibility to any person by reason of negligence) is accepted by Silverlight Asset Management LLC, its officers, employees or agents. This post may contain “forward-looking” information that is not purely historical in nature. Such information may include, among other things, projections and forecasts. There is no guarantee that any of these views will come to pass. Reliance upon information in this post is at the sole discretion of the reader.​​ 

Recent Blog Posts

  • Silverlight Strategies Outperformed In 2022
  • The Dobermans Of The Dow Have Outperformed In Bull And Bear Markets
  • Tech Stocks Will Probably Lag In The Next Bull Market

Archived Blog

  • January 2023 (2)
  • December 2022 (1)
  • October 2022 (1)
  • September 2022 (1)
  • June 2022 (1)
  • May 2022 (2)
  • March 2022 (1)
  • January 2022 (2)
  • December 2021 (1)
  • November 2021 (1)
  • August 2021 (3)
  • July 2021 (2)
  •  
  • 1 of 6
  • ››

Contact Us

Don't hesitate to get in touch with us.
We would love the opportunity to become your trusted advisor.

Phone: 949-629-2496

Email: mcannivet@silverlightinvest.com

23 Corporate Plaza, Suite 150, Newport Beach, California 92660

Get Directions

  • Sitemap
  • Legal, privacy, copyright and trademark information

© 2023 Silverlight Asset Management, LLC. All rights reserved.

Website Design For Financial Services Professionals